Gold Price Prediction – Prices Rise on Strong Asian Data

Gold prices moved higher, as the dollar lost ground, despite rising US yields. Better than expected data from China and Japan helped buoy yields. Riskier assets also gained traction following news that Moderna, a pharmaceutical company, reported that its coronavirus vaccine, had 94.5% efficacy in preventing COVID-19.

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Technical analysis

Gold prices edged higher pushing up against resistance is seen near the 10-day moving average at 1,898. The weekly chart of gold is forming a bull flag continuation pattern which is a pause that refreshes higher. Support is seen near the October lows at 1,850. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The fast stochastic has rebounded from oversold levels below 20 up to 31, which reflects accelerating positive momentum. Medium-term momentum is neutral and poised to turn positive as the  MACD (moving average convergence divergence) index looks like it is about to generate 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).

Japan Reports Robust Growth

Japan reported robust Q3 GDP data.  GDP grew 21.4% versus 18.9% expected and a revised -28.8% in Q2.  Exports and consumption were the main drivers. China also reported strong data. Chinese industrial production increased 6.9% year over year higher than expected while retail sales increased 4.3% year over year. Fixed asset investment picked up to 1.8% year over year, slightly stronger than expected.