Gold Price Prediction – Gold Consolidates After Dropping to New Range
Gold prices consolidated after rebounded late on Thursday, as the dollar gave up some of its gains at the tail end of the week. Stronger than expected Eurozone PMI data helped the euro gain ground paving the way for higher gold prices. Canadian CPI grew in line with expectations, notching up a robust 2.2% year over year figure. Gold prices broke down at the tail end of the second week of June, and resistance is seen near the 10-day moving average at 1,282. Target support is seen near the December 2017 lows at 1,236. Momentum is mixed. While the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory, the fast stochastic has generated a crossover buy signal in oversold territory which could foreshadow a correction. Prices are now in a new range, and trade sanction could keep prices under pressure.
Eurozone June composite PMI unexpectedly improved
The Eurozone June composite PMI unexpectedly improved to 54.8 from f 54.1 in May as the services reading jumped to a 4 months high of 55.0, from 53.8 in May. The manufacturing reading meanwhile fell back to an 18 month low of 55.0, versus 55.5 in the previous month. Markit reported that the services sector also provided the main impetus for driving up price pressures and stronger employment growth.
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Canadian CPI Matched Expectations
Canada CPI grew at a 2.2% year over year pace in May, matching the 2.2% rate of increase in April to undershoot expectations for an acceleration in the annual CPI growth rate. CPI expanded at only a 0.1% month over month pace after the 0.3% growth rate in April, which came in well short of expectations. CPI-trim slowed to 1.9% year over year from 2.1%, CPI-median was 1.9% year over year from 1.9% and CPI-common 1.9% year over year from 1.9%. The detail of the report reveal the widely anticipated run-up in gasoline prices was evident, with a 22.9% jump. But a 7.1% pull-back in the telephone services index partly offset the energy price climb in the total CPI tally, and also restrained core CPI.