Gold Price Prediction – Prices Rise Closing the Week Unchanged Following Weak PPI

Gold prices edged higher on Friday, as the dollar moved higher and US yields edged lower. The labor department reported US Producer Price came in at the lowest reading since April, and softer than expected. For the week gold prices were nearly unchanged after rallying 3% in the prior week.

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Technical analysis

Gold prices rebounded on Friday and finished the week unchanged. Prices made a higher high and a higher low but were unable to push through resistance. Prices are testing support near the 10-day moving average at 1,835. Resistance is seen near the 50-day moving average at 1,875.  Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 66, down from 73.  Medium-term momentum is positive but is decelerating as the MACD (moving average convergence divergence) histogram prints in the black with a decelerating trajectory, which points to consolidation.

PPI Comes In Softer Than Expected

According to the Labor Department, the producer price index up 0.1% in Novembere after increasing 0.3% in October. That was the smallest gain since April. In the 12 months through November, the PPI advanced 0.8% after increasing 0.5% in October. Expectatinos had been for PPI to grain 0.2% in November and rising 0.8% on a year-on-year basis. Excluding food, energy and trade services components, producer prices inched up 0.1%. The core PPI climbed 0.2% in October. In the 12 months through November, the core PPI gained 0.9% after rising 0.8% in October.