Gold Price Prediction – Prices Continue to Climb as Momentum Turns Positive
Gold prices continued to rally after breaking out on Monday in the wake of the Chinese government’s announcement of retaliatory measures following President Trump’s tweet that he will increase tariffs on 300-billion worth of Chine products. Chinese was labeled a currency manipulator by the US Treasure Department but many believe this is an empty threat. The treasury now needs to engage the IMF to determine the next steps. White House economic advisor Larry Kudlow told CNBC on Tuesday the United States holds the upper hand in trade negotiations with China due to the comparative strength of the U.S. economy.
Trade gold with FXTM
Your capital is at risk
Technical Analysis
Gold prices continued to rally on Tuesday after breaking out on Monday and are poised to test higher levels as positive momentum begins to accelerate higher. The first level of target resistance is seen near the May 2013 highs at 1,478. Short term support on gold prices is seen near the recent breakout level at 1,553. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. The fast stochastic accelerated higher and is now printing a reading of 87, above the overbought trigger level of 80 which could foreshadow a correction. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) 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 gold prices.
Chinese Named a Currency Manipulator
China was named a currency manipulator by President Trump and the US Treasury. China was kept on the watch list when it was last accused in May of 2019. The US Treasury must now work with the IMF to determine what steps will be taken next. The potential penalties are mild when viewed against the tariffs and other restrictions have already taken against China. Separately, White House economic advisor Larry Kudlow told CNBC on Tuesday the United States holds the upper hand in trade negotiations with Kudlow said that the Chinese economy is crumbling. It’s just not the powerhouse it was 20 years ago.