Gold Price Prediction – Prices Whipsaw as Risk Off is Mixed

Gold prices consolidate whipsawing and settling nearly unchanged as concerns about a new strain of the coronavirus spread through the Uk. The Greenback initially rose and then declined after hitting a 33-month low on last week. US yields moved higher despite a decrease in riskier assets. It appears that the U.S. Congress has agreed to a final stimulus package and a vote is likely to come on Monday or Tuesday with the President getting the bill by mid-week.

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Technical analysis

Gold prices whipsawed, moving higher and then lower before settling nearly unchanged. Support is near the 50-day moving average near 1,870, and the then 10-day moving average at 1,857. Target resistance is now seen near the November highs at 1,960.  Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are overbought. The current reading on the fast stochastic is 83, above the overbought trigger level of 80, which could foreshadow a correction. Medium-term momentum is positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.

Congress is Poised to Vote on Stimulus Bill

Congress prepared on a year-end stimulus package that included roughly $900 billion of relief for households and businesses battered by the coronavirus pandemic. The House is expected to vote first on a year-end compendium that includes the aid package, a $1.4 trillion spending bill that will fund the government through September, and many other measures, including an agreement to protect patients from surprise medical bills. The government’s current funding expires at midnight, putting lawmakers on the clock to finish drafting the legislative text of the final coronavirus-relief agreement and pass it through both chambers