Gold Price Prediction- Prices Trade Higher as Risk off Accelerates

David Becker
Comex Gold
Comex Gold

Gold prices edged higher on Wednesday, bouncing off support as the Euro gain traction against the greenback. The trading session could be described as a risk off trading session as stock prices where hammered sending investors to the safety of gold.  US producer prices edged higher in September but were lower than expected year over year.

Technical Analysis

Gold prices continued to trade sideways, moving higher but unable to push above resistance near the 10-day moving average at 1,193.  Support on the yellow metal is seen near and upward sloping trend line that comes in near 1,185.  Momentum is neutral as the MACD (moving average convergence divergence) histogram prints near the zero-index level with a flat trajectory which reflects consolidation. The fast stochastic is moving lower following a crossover sell signal that occurred as the beginning of the week.

Producer Prices Were Mixed

Wholesale price were in line with expectations but dipped year over year according to the Labor Department.  US PPI rose 0.2% in September according to the BLS, reversing the decline seen in August.  Expectation where for a 0.2% increase, which made the release in line with expectations.  Good price moved lower which where offset by a rise in services. Final Demand declined 0.1% in August. PPI rose 2.6% year over year which was slightly less than the 2.8% year over year level that was expected.

Core PPI Were In Line with Expectations

Core PPI which is a gauge of wholesale prices that that excludes food, energy and trade services rose 0.4% in September, the largest increase since January. The so-called core PPI had risen 0.1% in August. On a year over year basis in September core PPI rose 2.9%, the same as in August. Wholesale prices are an issue if they spill over into retail prices. The BLS is scheduled to release CPI on Thursday of this week.

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