Gold Price Prediction – Gold Drops as the Dollar Gains Traction
Gold prices moved lower on Tuesday following a long US holiday weekend. The yellow metal came under pressure as the dollar gained values. While US yields continued to drop to cycle lows, European yields outpaced US yields to the downside allowing the dollar to rise. The 10-year US yield dropped to 2.67, the lowest print since October of 2017. Jamie Dimon, the CEO of JP Morgan Chase, said that the next recession will likely be due to many factors including the trade war with China.
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Technical Analysis
Gold prices moved lower on Monday, pushing through short term support near the 10-day moving average which is now seen as resistance near 1,281. Additional resistance on the yellow metal is seen near the 50-day moving average at 1,288. Support is seen near an upward sloping trend line that comes in near 1,272. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The fast stochastic is printing a reading of 40, which is in the middle of the neutral range. Medium term momentum is neutral and is turning negative after recently generating a crossover buy signal. The MACD is about to generate a crossover sell signal. The MACD histogram is printing near the zero index level with a flat trajectory which points to consolidation.
Jamie Dimon is Bearish
Jamie Dimon the CEO of JP Morgan Chase said that he believes that the next recession will probably be caused by a confluence of factors that catch investors off guard, like impacts from the trade war or rising interest rates. While US growth could be in the last legs of its growth, that period could last years, he said. Trade is slowing down growth which has pushed US bond yields to the lowest levels in the past two years which shows that the markets believe that a recession is on the horizon.