Gold Price Prediction – Prices Edge Higher on Strong PPI Report
Gold prices edged higher and continue to trade sideways as the dollar whipsawed forming a doji day first moving lower and then settling unchanged. US yields moved lower as Jobless claims came out smaller than expected but US wholesale inflation came in slightly stronger than expected. US stocks moved lower which gave a bid to haven assets allowing the yellow metal to gain traction.
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Technical analysis
Gold prices rebounded but were unable to pierce through downward sloping trend line resistance seen near and edge through resistance near 1,960. Short term support is seen near the 10-day moving average near 1,946. Additional support is seen near the 50-day moving average at 1,916. Medium-term negative momentum is decelerating as the MACD histogram is printing in the red with a rising trajectory which points to consolidation. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The relative strength index is moving sideways to higher which is a sign of accelerating positive momentum.
US PPI Rises More than Expected
U.S. producer prices rose more than anticipated. The producer price index rose 0.3% in August after surging 0.6% in July, according to the Labor Department. Year over year through August, the PPI fell 0.2% after dropping 0.4% in the 12 months through July. Expectations had been for PPI to gain 0.2% in August and fall 0.3% on a year-on-year basis. Producer prices were led by a 0.5% increase in services. Excluding the volatile food, energy producer prices rose 0.3% in August, advancing by the same margin for three straight months.