Gold Price Prediction – Gold Rallies as Yield Curve Flattens
Gold prices moved higher on Tuesday, rising for the 4th consecutive day and participating in the risk-on rally. The U.S. yield curve continued to flatten, with the 2-year hitting a 21-month high while the 10-year yield eased. There continues to be a shortage of data released in the U.S. until later this week. The cancelation of thousands of air flights in the United States provided the backdrop of a safe-haven bid on gold prices. Additionally, Apple is closing its stores in New York City. Goldman Sachs requires vaccinations for all employees, which shows a renewed concern for the new COVID variant.
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Technical Analysis
Gold prices rallied for a 4th consecutive trading day, pushing to fresh December highs and blowing past the old December highs, which is now short-term support near $1,815. Additional support is seen near the 50-day moving average at $1,800. Resistance is seen near a downward sloping trend line at $1,857. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are overbought as the fast stochastic prints a reading of 87, above the overbought trigger level of 80. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices. The 10-day moving average is poised to cross above the 50-day moving average, which means a short-term uptrend could now be in place.