Gold Price Prediction – Prices Rise Drive by a Weakening DollarYields continue to rise
Gold prices rebounded on Monday following the news that Treasury Secretary Janet Yellen issued a warning Monday about the dangers that bitcoin poses both to investors and the public. The dollar moved lower helping to buoy the yellow metal and yields moved higher. Since gold prices are quoted in US dollars, a weaker dollar will lead to higher gold prices.
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Gold prices moved higher and testing resistance near the 10-day moving average at 1,809. Support is seen near the recent breakdown level which his an upward sloping trend line that comes in near 1,796. A break below this level again would potentially generate a test of the November lows at 1,764. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices were oversold, but the fast stochastic has rebounded up to 26, from below the oversold trigger level of 20. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line the 9-day moving average of the MACD line).
Yellen Belittles Bitcoin
Treasury Secretary Janet Yellen issued a warning Monday about the dangers that bitcoin poses both to investors and the public. Yellen said there remain important questions about legitimacy and stability. “I don’t think that bitcoin is widely used as a transaction mechanism,” “To the extent it is used I fear it’s often for illicit finance. It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering.”