Gold Price Prediction – Gold Prices Edge Higher as Geopolitical Tensions Remain
Gold prices moved higher but still had a difficult time pushing through resistance. Geopolitical risks remain high following this weekend’s bombing of Saudi crude production installations. It now appears that Iran used missiles launched from Iran as opposed to drones to hit Saudi Arabia. The Saudi’s expected to bring production back online, within a few weeks. Trader’s now await the Fed meeting which is scheduled for Wednesday afternoon. There is currently only a 3% chance that the Fed will not cut interest rates.
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Technical Analysis
Gold prices moved higher as geopolitical risks remain but prices were unable to push through the 10-day moving average at 1,505. Support on the yellow metal is seen near the 50-day moving average at 1,478. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal in oversold territory. Currently the fast stochastic is printing a reading of 18, which is well below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum is negative to neutral as the MACD histogram is printing in the red with a flat trajectory which points to consolidation.
Manufacturing Rises
The Federal Reserve reported that manufacturing production rose 0.6% last month after an unrevised 0.4% drop in July. Expectations were for manufacturing output to rise by 0.2% in August. Production at factories fell 0.4% in August on a year over yea5r. Manufacturing, which accounts for about 11% of the U.S. economy, is being hobbled by a year-old trade war between the United States and China and slowing global economic growth. The trade war has eroded business confidence. Its unlikely that a trade agreement will be mediated in October, which is likely to keep gold prices buoyed.
This article was originally posted on FX Empire
