Gold Price Prediction – Prices Rise Recapturing Support Following Weaker than Expected ISMEmployment in manufacturing remain in contraction territory
Gold prices moved higher and recaptured short-term resistance which is now support. The dollar moved lower following the softer than expected ISM manufacturing report. US yields were relatively stable but moved slightly lower giving a boost to the yellow metal.
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Gold prices moved higher and recaptured resistance which now support near the 10-day moving average at 1,892. Resistance is seen near the 50-day moving average at 1,945. The 10-day moving average crossed through the 50-day moving average which means a short-term downtrend is in place. Medium-term momentum is negative but consolidating and poised to turn positive as the MACD (moving average convergence divergence) line is about to crossover the MACD signal line. Short-term momentum has turned positive as the fast stochastic recently generated a crossover buy signal. The current reading on the fast stochastic is 38, rebound from the oversold trigger level of 20 which could foreshadow a correction.
ISM Manufacturing Index Edged Lower
The monthly PMI Manufacturing index reported by the ISM (Institute of Supply Management) slid to 55.4% from 56% in August. Expectations had been for the reading to increase to 56.3%. New orders were the main catalyst for the decline dropping by 7.4 points to 60.2% while, production fell 2.3 points to 61%, and employment remained in contraction territory, at 49.6%. Factory employment has been contracting since July 2019, posing a challenge to President Trump and his reelection bid after promising to revive American manufacturing.