Gold prices moved higher on Monday, despite a stronger dollar which appears to have rallied for the 6th consecutive trading session. US yields moved lower as riskier assets continued to gain traction. With the coronavirus spreading, and more instances of reported issues, investors are flocking to dollar-denominated assets. Gold prices generally come under pressure when the dollar rises, but the safe-haven status of gold has kept the yellow metal buoyed. CNBC says that US growth could drop to 1.2% in the Q1 and then rebound back to 2% in the Q2.
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Gold prices climbed on recapturing support near the 10-day moving at 1,570. Resistance is seen near the February highs at 1,592 and then the January highs at 1,611. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. The movement is choppy which likely means that gold is going to consolidate. The RSI slid sideways and is hovering in the middle of the neutral range and reflects consolidation. The MACD histogram is printing in the red with a flattening trajectory which also points to consolidation.
US Growth Could Drop
US growth could decline significantly in Q1 according to CNBC. A survey that CNBC conducted of 11 forecasters over the weekend finds first-quarter GDP estimates averaging just 1.2%, down nearly a point from the fourth quarter. Expectations are for a bounce back to 2% growth in the second quarter, depending on the severity of the virus both in China and in other countries.
This article was originally posted on FX Empire
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