Gold Price Prediction – Prices Rise Hitting Fresh Highs as the Dollar Heads South

Gold prices continued to rally on Wednesday taking hitting fresh 8-year highs and poised to test target resistance levels above $1,900. The dollar dropped sharply on Wednesday which paved the way for higher commodity prices, helping to buoy the yellow metal. COVID continues to spread through the United States, as the country notched up more than 3-million cases.  The Fed’s Mester and Bolstic were on the tape today saying that growth in the US could be leveling off.

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Technical Analysis

Gold prices rallied on Wednesday breaking out to fresh 8-year highs. Prices are now poised to test target resistance near the August 2011 highs at $1,921. Support is seen near the 10-day moving average at 1,779 and additional support is seen near the 50-day moving average at 1,733. Short term momentum is positive as the fast stochastic recently generated a crossover buy signal. The current reading on the fast stochastic is 94, well above the overbought trigger level of 80 which could foreshadow a correction. Medium-term momentum remains positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.

The Fed Sees Growth Plateauing

Cleveland Federal Reserve President Loretta Mester said that her region was experiencing slowing growth due to rising coronavirus cases, and she sees more policy help necessary to help the economy through the pandemic. Mester reiterated her colleague Atlanta counterpart, Raphael Bostic, who also said he sees a rougher road to recovery.