Gold Price Prediction – Prices Rise as the Dollar Drops
Gold prices moved higher, pushing through short-term resistance and poised to test trend line resistance above. The dollar moved lower closing near its lows for the session. A weaker dollar generally leads to gains in precious metals. Since gold is priced in U.S. dollars a waker dollar buoys the yellow metal. U.S. yields were mixed, with the 10-year yield rising while the 2-year yield pulled back. A rise in the building confidence helped buoy the long end of the treasury curve, which capped upside momentum in the yellow metal. Hedge fund manager Paul Tudor Jones was on CNBC on Wednesday saying that inflation is here to stay.
Technical analysis
Gold prices rallied, moving through short-term resistance, which now supports near the 50-day moving average at 1,779. Additional support is seen near the September lows at 1,721. Resistance is seen near a downward sloping trend line that comes in near 1,793. Short-term momentum turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher gold prices.
This article was originally posted on FX Empire
