Gold Price Prediction – Prices Drop as the Dollar Gains Traction
Gold prices retraced on Friday as the dollar gained traction. The rise in the greenback weighed on the yellow metal because gold is generally quoted in U.S. dollars. Despite stronger than expected Chicago PMI business activity, U.S. yields were slightly lower.
Gold prices reverse course, dropping lower by more than 1.1% and slicing through support now resistance at the 10-day moving average at 1,786. Support is seen near the October lows at 1,750. The 10-day moving average crosses above the 50-day moving average, which means a short-term uptrend will be in place. Short-term momentum turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is consolidating as the MACD histogram is printing in positive territory with a sliding trajectory which points to consolidation.
Chicago PMI Rises More than Expected
Chicago Business activity index rose to 68.4 in October compared to expectations that the index would rise to 63.5. Firms say freight difficulties and the available supply of raw materials continue generated headwinds for businesses. Among the leading five indicators, prices rose to a 42-year high. Only Production Fell through October.