Gold Price Prediction – Prices Consolidate After Attempting to Rally

Gold prices attempted to break out and made their highs during the Asian trading hours. Prices eased lower and ending the session unchanged, after rising $28 per ounce at their highs. The 10-year yield hit a yield of .49 basis points down another 15-basis points from Friday. Investors have now baked in a 50-basis point interest rate cut when the Fed meets again in 2-weeks. This follows the emergency interest rate cut the Fed announced on Tuesday, which cut 50-basis points from the Fed Fund rate. The dollar continued to trend lower, hitting 95 on the dollar index down another 1%, breaking down pushing through the 2020 lows, hitting fresh 18-month lows. With the dollar continuing to move down, gold prices are still poised to move higher. Hedge funds reduced long positions in futures and options but remain long compared to short positions by more than 10-fold.

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Gold prices broke out making fresh 7-year highs but were unable to remain elevated during the trading session. Prices pushed through the February highs hitting 1,704. Short term support is seen near the 10-day moving average at 1,639. Additional support is seen near the 50-day moving average at 1,583.  Medium-term momentum has turned positive. 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 also generated a crossover buy signal, crossing through the zero-index level. The index has an upward sloping trajectory which points to accelerating positive momentum.