Gold Price Prediction – Gold Breaks Out of Trend Line Resistance on Dollar Weakness

Gold broke above trendline resistance on Friday as the dollar collapsed, pushing all commodities higher. US Treasury yields have traded sideways for most of the week since rising. The White House has announced that it will raise its economic target and is preparing a $ 1.8 trillion coronavirus relief offer, its largest proposition yet. The added stimulus would weigh on US yields and depreciate the dollar, causing the greenback to decline, paving the way for higher gold prices.
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Technical analysis
The price of gold rose 1.65% on Friday as the dollar fell. Prices broke trendline resistance which is now near recaptured resistance for the short term and is now near 1,912. Resistance is near the 50-day moving average of 1,939. The medium-term dynamic has developed positively as the MACD index (Moving Average Convergence Divergence) generated a crossover buy signal. This occurs when the MACD line (the 12-day moving average minus the 26-day moving average) crosses the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram also produced a crossover buy signal rising above it. The short term momentum has been positive as the fast stochastics produced a crossover buy signal in the middle of the neutral range.
The White House is increasing the supply of stimuli
The White House has announced that it will raise its economic target and is preparing a $ 1.8 trillion coronavirus relief offer, its largest proposition yet. Treasury Secretary Steven Mnuchin is expected to discuss a new $ 1.8 trillion proposal with House Speaker Nancy Pelosi. The White House proposal marks a further reduction in the distance between the government and democratic leaders compared to the total price of the law. Still, it's nearly $ 0.8 trillion the level desired by the House of Representatives, and investors aren't sure if a deal will come off before the elections.
This article was originally published on FX Empire
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