Gold Price Prediction for March 21, 2018

Gold prices moved lower, ahead of the Fed’s monetary policy meeting, and initially tested resistance which was the former breakdown level which coincides with the 10-day moving average at 1,320.  Support on the yellow metal is seen near the February lows at 1,302.  Momentum has turned negative as the MACD (moving average convergence divergence) index recently generated a crossover sell signal. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices. The fast stochastic also generated a crossover sell signal and is close to the oversold trigger level of 20 which could foreshadow a correction.

FOMC Forecast revisions, to be released Wednesday

FOMC Forecast revisions, to be released Wednesday in conjunction with the FOMC statement, should reveal big boosts in the 2017 GDP estimates, alongside modest upward tweaks in the 2018 PCE chain price estimates and small trimmings in the jobless rate estimates across the forecast horizon. For GDP, the Fed’s December estimates incorporated the CBO scoring of the Senate tax bill, but not the more aggressive CBO scoring of the final tax law, and the Fed has yet to incorporate growth boosts from the February budget bill. GDP growth boosts of 0.2%-0.3% through 2019, and smaller boosts in 2020. The jobless rate estimates could be reduced by 0.1% across the board, given a stronger growth path for payrolls. The market is focused on the dot-plot, but we think that policymakers will refrain from committing to a steeper tightening path, leaving only tiny upward tweaks in a few rate forecasts.

U.S. chain store sales fell 1.2% to 114.1 in the March 17 week, after rising 0.6% in the prior week. The 12-month pace was little changed at 2.7% year over year versus 2.8% year over year previously. The Nor’easter that hit during the week dented sales, as did St Patrick’s Day which fell on Saturday, which likely left potential shoppers parade watching instead, according to the report. Meanwhile, the quarter is shaping up to be the best since Q1 2012 when sales were up 3.4% year over year.