Gold Price Prediction – Prices Drop on Profit Taking
Gold prices moved lower as a round of profit-taking took prices of the yellow metal back to the open of the week. This forms a doji day with a long upward wick, which appears to be a rejection of higher levels. The US dollar was down for the day but up for the week. Gold volatility, as reflected by the Gold VIX moved lower on Friday and was down for the week, which generated the 5-consecutive lower week for gold volatility.
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Technical Analysis
Gold prices moved lower following two-second consecutive sessions of consolidation and a surge to a 7-year high. Resistance is now seen near the April highs at 1,747. Target resistance near the August 2012 highs near 1,791. Prices appear to have bounded at the 10-day moving average at 1,685. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. This happened as the fast stochastic is printing a reading of 76, coming from oversold levels which could foreshadow a continuation of a correction. Medium-term momentum remains positive and has started to consolidate as the MACD (moving average convergence divergence) histogram is still printing in the black with a declining trajectory which points to consolidation.
It will Take Time for the Economy to Come Back
New York Federal Reserve President John Williams in an interview on CNBC said he sees some parts of the economy coming back online but doubts growth will return to normal this year. He initially sees a return to construction jobs, but services jobs like restaurants and bars will take some time to return.
This article was originally posted on FX Empire
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