Gold Price Prediction – Prices Settle Off Highs as Dollar Slide Buoys Gold

Gold prices initially attempted to move higher on Monday, but where unable to gain traction despite a slip in the dollar. Riskier assets continued to climb, taking some of the fear out of the market which has weighed slightly on gold. The stronger than expected US payroll data released on Friday failed to buoy yields and the greenback, which has help the yellow metal remain buoyed.

Technical Analysis

Gold prices whipsawed initially moving higher and then easing. While the uptrend in gold prices remain in tact, support is seen near the 10-day moving average at 1,277. Additional support is seen near the 50-day moving average at 1,237. Short term momentum has turned negative as the fast stochastic recently generated a crossover sell signal. The current reading on the fast stochastic is 86, which is above the overbought trigger level of 80 which could foreshadow a correction. The MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory which points to decelerating positive momentum. The MACD is poised to generate a crossover sell signal. This occurs when the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line. The MACD line slipping toward the zero-index line.

European Data was Mixed as Retail Sales Beat Expectations

Germany reported both retail sales and factory order on Monday. The former was better than expected while the latter missed. Factory orders dropped by 1% more than the 0.1% dip expected. The driver was orders which dropped nearly 12% the most since 2008. Orders declined 4.3% year over year which was the most in a 6-year span. Additionally, Germany reported a 1.4% rise in November, which was much better than expected The 0.3% decline in October was revised away and replaced with a 0.1% gain.