Gold Price Prediction – Prices Form Doji Day, Ahead of Brexit Vote
Gold prices were nearly unchanged on Friday forming a doji day, which is where the open and the close are at the same level which is a sign of indecision. The move comes despite a surge in both the euro and pound which put downward pressure on the dollar. This would normally lift gold prices, but ahead of this weekend’s vote on Brexit, gold prices remain range-bound. Chinese growth disappointed coming in worse than expected showing that the trade war between the US and China is taking its toll. The US tariffs on $7.5 billion of European started on Friday, this is likely to further erode both US and European growth.
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Technical Analysis
Gold prices were nearly unchanged on Friday moving in a tight range and forming a doji day. Prices are testing resistance is seen near the 10-day moving average at 1,492, and then a downward sloping trend line that comes in near 1,511. Support is seen as an upward sloping trend line seen near 1,475. Short term momentum is positive as the fast stochastic generated a crossover buy signal. The fast stochastic is printing in the middle of the neutral range. Medium-term momentum is flat. The MACD histogram is printing in the red with a flat trajectory that points to consolidation.
Chinese Growth Slows
China’s Q3 GDP decelerated to 6.0%. The report was in line with expectations. Both industrial output and retail sales strengthened for September. A rebound on the pork industry following the African swine flu could help buoy the recovery. The US tariffs on $7.5 billion of European goods start Friday. The tariffs cover a range of products, including consumer goods. In this case the tariffs that the US plan to place on Europe were sanctioned by the World Trade Organization.