Gold Price Prediction – Prices Rise on Dollar Weakness

Gold prices moved slightly higher on Tuesday as the dollar tumbled, paving the way for higher gold prices. U.S. Yields moved lower following a softer than expected U.S. Durable Goods orders report released by the Commerce Department.  The Federal Reserve started its 2-day monetary policy meeting on Wednesday. Expectations are for the fed to keep rates unchanged.

Technical analysis

Gold prices moved higher on Monday on broad dollar weakness but remain rangebound.  Support is seen near an upward sloping trend line that connects the lows in March to the lows in June and comes in near 1,798.  Resistance is seen near the 10-day moving average at 1,810. The fast stochastic edged up from the oversold trigger level to 23, reflecting a small amount of accelerating positive momentum. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram also generated a crossover sell signal pushing through the zero-index with a  declining trajectory which points to lower prices.

Durable Goods Order Rise Less than Expected

According to the U.S. Commerce Department, Durable Goods orders advanced 0.8% in June after rebounding 3.2% in May. The headline number missed expectations. Orders were driven by a 2.1% increase in orders for transportation equipment. Orders for civilian aircraft climbed 17.0%. Orders for motor vehicles and parts slipped 0.3% after rising 2.0% in May. Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.5% last month. These so-called core capital goods orders had gained 0.5% in May. Expectations were for core capital goods orders to increased by 0.7% month over month.