Gold Price Prediction – Prices Slip and Consolidate as the Dollar Eases

Gold prices moved lower on Monday and continue to consolidate. The dollar moved down, led by gains in the Euro, which appear to be breaking out again. US yields moved sideways and remain steady as investors await a decision on stimulus. Riskier assets initially moved higher but whipsawed, sending the yellow metal lower. According to the latest commitment of trader’s report, hedge funds have been added to a long position in futures and options and reduced short position in futures and options.

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Technical analysis

Gold prices traded lower and continue to trade in a sideways consolidation pattern. Prices made a higher high and a higher low but were unable to push through resistance. Prices pushed through support which is now resistance near the 10-day moving average at 1,840. Support is seen near an upward sloping trend line that comes in near 1,781.  Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 66, down from 73.  Medium-term momentum is positive but is decelerating as the MACD (moving average convergence divergence) histogram prints in the black with a decelerating trajectory, which points to consolidation.

European Industrial Production Rose More than Expected

The EU Industrial production rose more than expected. October Industrial production rose 2.1% month over month versus expectations that it would rise by 2.0%. September was revised up to 0.1% month over month from -0.4% previously.