Technical Analysis Gold for November 24, 2015

Gold prices retraced earlier gains as the dollar gained traction against most major currencies.  With the German versus U.S. yield spread hitting multi-year lows, gold prices will have a difficult time holding support levels.  Monday’s stronger than expected Fed Chicago Activity index help boost the greenback. Gold is poised to test support near last week’s lows at 1,063.  Resistance on the yellow metal is seen near the 10-day moving average at 1,079.  Momentum remains negative but the trajectory of the MACD is flattening pointing to consolidation.  The relative strength index (RSI) remains oversold printing a reading 27, which is well below the oversold trigger level of 30.

Chicago Fed’s National Activity index improved to -0.04 in October after holding steady at -0.29 in September and August. However, the index has been in negative territory in 8 of the 10 months to date. The October 3-month moving average rose to -0.20 from -0.03 in September, and August’s 0.05.