Gold Price Prediction – Prices Rise, But Fail to Eclipse Resistance

Gold prices moved higher on Monday but settled well off session highs. Prices increased along with most commodities led by a surge in crude oil prices. The dollar eases, despite higher US yields as European and Japanese yield outpaced their US counterparts.  Gold also continues to remain a safe haven for those who believe the Brexit will generate havoc for both the UK and EU.

Technical Analysis

Gold prices whipsawed surging higher during the European trading session but was unable to hold above resistance seen near the 10-day moving average at 1,295. Additional resistance is seen near the 50-day moving average at 1,307. The trend continues to point to lower prices. The 10-day moving average recently crossed below the 50-day moving average which means that a short-term down trend is now in place.

Short term momentum has turned positive as the fast stochastic recently generated a crossover buy signal. This occur when the fast-stochastic reading was 11, which was in oversold territory and captures the accelerating in short-term momentum. The fast-stochastic trajectory is upward sloping which reflects accelerating positive momentum. The current reading is 29, which is in the lower end of the neutral range, clearing the oversold trigger level of 20. Medium term negative momentum is decelerating. The MACD (moving average convergence divergence) histogram is printing in the red with a rising trajectory which points to consolidation.

Rising US Yields Fail to Weigh on Gold prices

Gold prices have gained traction due to the rebound in the Euro and the failure of the greenback to gain traction despite higher US yields. On Friday the Department of Labor reported a stronger than expected jobs report. Wages are also growing at 3.2% year over year. This likely takes away any potential easing or tightening that the fed would forecasts during the balance of 2019. With earnings season approaching, risk could be buoyed by a disappointing earnings forecast.