Gold Price Prediction – Prices Fall on Dollar Strength

Gold prices moved lower and continued to chop sideways and remain rangebound.  Gold prices moved as the greenback moved higher. Yields also moved higher despite riskier assets like stocks moving lower. There is a two-day Fed meeting this week. Most expect the Fed to accelerate its tapering and for individual forecasts to shift, reflecting an inflation picture that is not transitory. The Fed is now expected to raise interest rates twice in 2022.

Technical Analysis

Gold prices moved dropped. Support is seen near the 10-day moving average at 1,780. Additional support on the yellow metal is seen near the September lows at 1,721. Resistance is seen near the 50-day moving average at 1,796. The 10-day moving average has crossed below the 50-day moving average, which means a short-term downtrend is in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term negative momentum is poised to turn positive as the MACD (moving average convergence divergence) index is about to generate a crossover buy signal.

Producer Price Index Rises

The producer price index increased 9.6% over the previous 12 months after rising another 0.8% in November. Expectations were for an annual gain of 9.2%. Excluding food, energy and trade services prices rose 0.7% for the month, putting core PPI at 6.9%, also the largest gain on record. Estimates were for respective gains of 0.4% and 7.2%, meaning the monthly gain was faster than estimates but the year-over-year measure was a bit slower.