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Gold Price Prediction – Prices Test Resistance as US Yields Drop
By:
CPI rises slightly
Gold prices again attempted to move higher but ran into strong resistance. The dollar moved lower helping to buoy the yellow metal. US yields moved down following a soft CPI report. Federal Reserve Chairman Jerome Powell spoke to the NY economics club and described a bleak U.S. employment picture. The Fed chair said that aggressive monetary policy support would be needed to fix the myriad issues.
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Technical analysis
Gold prices attempted to move higher but ran into resistance near the 50-day moving average at 1,857. Short-term support is seen near the 10-day moving average at 1,834. Additional support is an upward sloping trend line that comes in near 1,788. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).
US CPI Rise Slightly
US consumer prices rose moderately in January. The Labor Department reported that its consumer price index increased 0.3% last month after climbing 0.4% in December. Year over year in January the CPI rose 1.4% after a similar gain in December. Economists expected the CPI to rise by 0.3% and increasing 1.5% year-on-year.
About the Author
David Beckerauthor
David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.
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