Gold Price Prediction – Prices Slide as the Dollar Strengthens Following ECB Decision
Gold prices moved lower as the dollar gained traction and the Euro sold off. This followed an announcement from the European Central Bank that they would keep rates unchanged but hinted that further policy change was in the cards. The US reported stronger than expected GDP data as well as a smaller than expected rise in jobless claims.
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Technical analysis
Gold prices moved lower and are poised to test support is seen near the September lows at 1,848. Prices made a new low for the month of October. Resistance is seen near the 10-day moving average at 1,904. Short-term momentum is negative as the fast stochastic recently generated a crossover sell signal on the upper end of the neutral range. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line. The MACD histogram also generated a crossover sell signal. The index sliced through the zero-index line. The histogram has a negative trajectory that points to lower prices.
The ECB Get Rates Unchanged but Hinted at Future Action
The European Central Bank decided to keep its rates and wider monetary policy unchanged but suggested that additional policy action in the eurozone could come as soon as December. This comes as Germany and France are headed for lockdowns. Generally, the ECB makes changes after it changes its economic forecasts. The latest statement from the ECB suggests that policymakers will adjust their monetary policy based on those upcoming estimates of economic growth.
This article was originally posted on FX Empire
