Gold Price Prediction – Prices Slide as Positive Earnings Sentiment Buoys the Dollar and Weighs on Gold

Gold prices moved lower on Tuesday as the Chinese now seem to agree with phase one of the US-Chinese trade agreement. Trump and Xi are scheduled to meet on the sidelines of the APEC meeting in the middle of November. On the geopolitical front, Turkey and Syria remain in the headlines. After the US withdrew from northern Syria and Turkish forces moved in, the Kurds had no choice but to look to Syrian forces loyal to President Assad.  The US has now lost any voice in this conflict which is what President Trump likely wanted.

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Technical Analysis

Gold prices moved lower pushing down after Monday’s inside day. Prices are poised to test support which is seen near an upward sloping trend line that comes in near 1,473. Resistance is seen near the 10-day moving average at 1,496, and then a downward sloping trend line that comes in near 1,513. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The fast stochastic is printing in the middle of the neutral range. Medium-term momentum has also turned negative. The MACD histogram is printing in the red with a declining trajectory which points to accelerating negative momentum and lower prices.

Positive Sentiment Weighs on Gold Prices

Gold prices lost ground as riskier assets gained traction. As stock prices move higher, US yields move in tandem. The higher yields reflect the market’s belief that the dark clouds that have covered any trade agreement could be getting lifted. Higher US yields and a weak European economy point to a stronger dollar which weighs on the price of the yellow metal. Better than expected earnings were released on Tuesday in the banking sector which buoys the US stock market, raising yields and pushing gold lower.