Gold Price Prediction – Gold Eases Rejecting the Latest Breakout
Gold prices dropped on Tuesday, as the dollar gained traction paving the way for lower gold prices. The Bond markets in the United States reopened after closing on Monday as despite lower yields gold prices moved lower. US inflation figures came out in line with expectations but the lower level of year over year increases weighed on the yellow metal.
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Technical analysis
Gold prices tumbled on Tuesday after consolidating on Monday and rallying on Friday. Prices pushed below the recent break out level near trend line resistance which was short-term support near 1,908. Additional resistance is seen near the 50-day moving average at 1,936. Support is seen near the 10-day moving average at 1,901. 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 also generated a crossover buy signal rising above the zero-index line. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal in the middle of the neutral range.
Inflation in the US Rises in Line with Expectations
The consumer price index rose by 0.2% last month after gaining 0.4% in August. Expectations were for CPI to rise by 0.2% in September. The CPI advanced 0.6% in both June and July after falling in the prior three months as business closures to slow the spread of the coronavirus weighed on demand. A 6.7% jump in the prices of used cars and trucks again accounted for most of the increase. People who want to avoid public transportation scrambled to purchase used vehicles.