Gold Price Prediction – Prices Slide on Strong Dollar Gains

Gold prices moved lower, declining 1.8% after finishing the week down 0.8%. The dollar moved higher as U.S. short-term treasury yields surged in the wake of the decision by President Biden to renominate Fed Chair Powell. Strong gains in the greenback put downward pressure on the entire precious metals complex.

Technical analysis

Gold prices moved lower, breaking down through support resistance near the 12-day moving average at 1,845. Support is seen near the 50-day moving average at 1,789. Medium-term momentum has turned negative as the MACD (moving average convergence divergence index) generated a crossover sell signal. This scenario occurs as 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. Short-term momentum is also negative as the fast stochastic recently generated a crossover sell signal.

Biden Renominates Powell

On Monday, President Biden said that he would renominate Jerome Powell as the Fed Chair and nominate Lael Brainard to the Vice-Chair of the Federal Reserve. The continuity provided by renominating Jerome Powell, a Republican appointed by former President Trump, was well received by market participants.