Gold Price Prediction – Gold Trades Sideways Following Weak Chinese Data
Gold prices moved higher but remain rangebound on Monday, as US yields remain soft following weaker than expected Chinese data. With the worlds second largest economy softening, it will be hard for the US to continue to outshine. The shutdown of the US government will also take some of the steam out of US growth.
Technical Analysis
Gold prices remain range bound and are forming a bull flag pattern which is a pause that refreshes higher. Support is seen near the 20-day moving average at 1,272. Additional support is seen near the 200-day moving average at 1,248. The 20-day moving average recently crossed above the 200-day moving average, which shows that a medium-term up trend is in place. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Momentum, as reflected by the MACD (moving average convergence divergence) index, is also negative as the 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.
Chinese Exports and Imports Disappointed
China reported weaker than expected traded data as the surplus expanded to 57 billion from 41.8 billion in November. The widening of the surplus reflects a decline in growth in China. Exports declied by 4.4% compared to expectations that they would increase by 2%. The decline in exports was a 2-year low and reflects declining growth. Imports dropped by 7.6% compared to expectations that they would rise by 4.5%. Exports to the United States dropped by nearly 4% in December compared to a 10% increase in November. The decline in US exports appears to be a snap back following a large number of exports that moved to the US ahead of potential tariffs in the early fall.
China’s exports to the U.S. rose 11.3% in 2018, while imports from the U.S. inched up 0.7%, according to the China’s General Administration of Customs. Chinese total exports rose 9.9% for 2018, while imports climbed 15.8%. That compared with growths of 7.9% and 15.9%, in the prior year.
This article was originally posted on FX Empire
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