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Gold Price Prediction – Prices Rise but Fail to Break Out

Momentum remains positive
David Becker

Gold prices formed a doji day after attempting to break out above trend line resistance on Friday. The rally initially came as the dollar moved higher which is counter-intuitive. US yields were also on the rise as risking assets continued to gain traction. Momentum remains positive, despite prices falling short of a convincing breakout level.

Technical Analysis

Gold prices moved higher pushing through trend line support and surging higher but closing near the open forming a doji day. Prices closed at trend line resistance near 1,504. The next level of target resistance is seen near the October highs at 1,519. Support is seen near the 10-day moving average at 1,491. Additional support is seen near the 100-day moving average at 1,462. Short term momentum has turned positive, after recently generating a crossover buy signal. The fast stochastic is printing in the middle of the neutral range. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the black with a rising trajectory that points to higher prices.

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US-Chinese Trade Negotiations Lift Gold Prices

China is now beginning to negotiate and attempt to slightly alter the current trajectory of phase 1 of the trade deal. China is offering to purchase 20 billion a year of US agricultural products which is the amount purchase in 2017 if the US will return tariffs back to the 2017 levels. This might make the phase 1 portion of the deal more difficult than previously expected. President Trump was on the tape on Friday claiming that a deal was in reach.

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