Gold Price Prediction – Prices Rise to New Highs as Consumer Confidence TumblesHedge funds add to long position in futures and options
Gold prices rallied to new fresh all-time highs on robust volume as traders continued to buy the yellow metal. Hedge funds continued to add to long position in futures and options while reducing short positions according to the CFTC. According to the latest commitment of trader’s report released for the date ending July 21, managed money increased long position in futures and options by 4.5K contracts while reducing short position by 2.5K contracts. The dollar continues to slide which helped buoy the price of the yellow metal.
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Gold prices continued to rally to fresh all-time highs and are poised to test higher levels. Support is seen near the prior highs at 1,921 and then the 10-day moving average near 1,863. Medium-term momentum has turned positive and continues to accelerate higher as the MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory points to higher prices. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The fast-stochastic is printing a reading of 94 above the overbought trigger level of 80, which could foreshadow a correction. The RSI also surged higher reflecting accelerating positive momentum and is printing a reading of 87, above the overbought trigger level of 70 which could foreshadow a correction.
US Consumer Confidence Tumbles
U.S. consumer confidence tumbled in July to a reading of 92.6 as coronavirus infections spread in many parts of the country. Most of the big declines came in states that have had huge increases in the number of new COVID-19 cases. There was a large decline in the expectations index reflected big drops in sentiment in Michigan, Florida, Texas, and California, all states that have seen a resurgence in coronavirus cases. This was down from a reading of 98.3 in June.