Gold Price Prediction – Prices Rise Slightly but Continue to Consolidate

Gold prices consolidated, moving slightly higher on Monday as the dollar moved sideways and U.S. treasury yields increased slightly. The lack of momentum came despite a stronger-than-expected U.S. durable goods order report that showed the U.S. economy is experiencing upward growth.

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Technical analysis

Gold prices moved higher on Monday but opened where it closed which is a sign of indecision. This occurs after last week’s unchanged movement in the yellow metal. The upward trend remains in place as prices head for resistance near a Fibonacci retracement level of 38.2%, which is seen near 1,828. Target resistance on the yellow metal is seen near the February highs at 1,855. Support is seen near the 10-day moving average at 1,770. The 10-day moving average has crossed above the 50-day moving average which means that a short-term uptrend is now in place. Short-term momentum reversed and turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 76, down from 83, which reflects accelerating negative momentum. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram is printing in positive territory with a declining trajectory which points to consolidation.

U.S. Durable Goods Rose

U.S. Durable Goods orders stoked manufacturing demand that has been building since last fall. According to the Commerce Department, new orders for durable goods increased by 0.5% to $256.3 billion in March compared with February. New orders for nondefense capital goods excluding aircraft—which are called core capital goods orders, a closely watched proxy for business investment, rose 0.9% in March from the previous month. That was up from a 0.8% decline last month. Overall growth in durable goods orders was slowed by a decline in aircraft orders, with new orders for nondefense aircraft and parts dropping 46.9% in March.