Gold Price Prediction – Gold Rallies as Dollar Loses Ground
Gold prices moved higher on Tuesday, as the dollar weakened despite rising US yields. The EUR/USD whipsawed higher, despite a mixed ZEW survey which showed that future conditions are expected to get better. The CNBC Fed survey for March shows weaker global growth pointing to tariffs as the impetus for the drop in GDP. Slower growth should weigh on the US dollar and pave the way for higher gold prices.
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Technical Analysis
Gold prices rebounded on Tuesday, recapturing resistance which is now support near the 50-day moving average at 1,302. Additional support is seen near the 10-day moving average at 1,298. Target resistance is seen near a downward sloping trend line that comes in near 1,345. Medium term momentum has turned positive as the MACD (moving average convergence divergence) index recently 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 the black with an upward sloping trajectory which points to higher prices. Short term momentum has also turned positive as the fast stochastic regenerated a crossover buy signal. The fast stochastic trajectory is upward pointing to higher prices.
German Zew Fell
The German Zew survey which reflects current conditions declined in March from 15 to 11.1. Expectations of future market conditions increased for a 5th consecutive month to -3.6 from -13.4. Both numbers where unexpected.
US Growth to Slow
The CNBC Fed Survey for March points to weaker global growth and tariffs are seen as the impetus. The average forecast for gross domestic product growth this year is just 2.3% down from 2.4% expected in the January survey. Economic growth is seen slipping below 2% in 2020, according to the survey.