Gold Price Prediction – Prices Whipsaw and Close Lower
Gold prices edged lower on Tuesday but rebounded from session lows. The dollar found traction after declining for 2 consecutive trading session. The drop in the greenback came despite higher Treasury yields. Since gold is priced in U.S. dollars, a stronger U.S. currency makes gold less attractive in other currencies. The Atlanta Federal Reserve is forecasting gross domestic product growth braking to a 2.3% annualized rate in the third quarter. The U.S. Trade Deficit rallied to a record high in August.
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Technical analysis
Gold prices closed lower but well off the session lows. Resistance is seen near the 50-day moving average at 1,780. Support is seen near the 10-year moving average at 1,752. Short-term momentum is positive as the fast stochastic recently generated a crossover buy signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index 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 positive territory with an upward sloping trajectory which points to higher prices.
Trade Deficit Hits Record
The U.S. trade deficit surged to a record high in August, boosted by imports. According to the Commerce Department, the trade deficit surged 4.2% to $73.3 billion in September, the highest since the government. Expectations were for the trade gap to widen to $70.5 billion.