Gold Price Prediction – Prices Whipsaw But Trend Lower

Gold prices whipsawed and traded near support as riskier assets gained traction on Monday. The dollar moved higher after declining on Friday, but Treasury Yields continued to move lower. Concern over the new covid variant has taken its toll on sentiment. The markets will now wait to see if the current vaccines are effective against the new variant before the next move in the markets are forged.

Gold prices whipsawed holding just below resistance, is seen near an upward sloping trend line that comes in near 1790. This level coincides with the 50-day moving average at 1,790. Support is seen near the November lows at 17,58. 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 has turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold as the fast stochastic is printing a reading of 12, below the oversold trigger level of 20.

Pending home sales jumped 7.5% from September, according to the National Association of Realtors. Expectations were for pending home sales to remain flat month over month. Sales were still 1.4% lower than in October 2020. Pending sales are a forward-looking indicator of sales that will close in one to two months.