Gold Prices Weekly Forecast February 13-17
New York (Feb 12) Gold prices rose at the start of last week’s trading, continued higher into Wednesday, experienced a setback Thursday, but found support on Friday and ended the week with a gain. The contract for April settlement on the COMEX division of the New York Mercantile Exchange ended the week at $1,234.7, a gain of 1% for the week overall.
Gold came under pressure on Thursday after US President Donald Trump said in a meeting with airline executives that his goal of lowering business taxes was moving “ahead of schedule.” This sent equity markets moving higher and gold reacted with a move to the downside.
While support was found on Friday above former resistance levels at the highs established in January, the bias heading into next week is to the downside.
First, a negative divergence is in place between gold prices and the Stochastic, a price momentum indicator. The divergence is minimal. However, it warns of decreasing upside price momentum.
In addition, open interest has not been supportive during the latest move to the upside. From the January 26 closing low through last Friday (preliminary data available) open interest has declined 5.8%, suggesting the latest move higher has been driven by short covering. This is not a constructive sign as far as sustainability is concerned.
It currently appears that gold prices came within reach of resistance at $1,250 came under pressure. The negative divergence in place with the Stochastic and lack of support from open interest leaves the bias to the downside in next week’s trading.
In economic news this week in the US, no releases are on the calendar Monday. On Tuesday at 08:30 ET, PPI will be released. A reading at 0.3% is expected, unchanged from December.
Wednesday’s calendar is packed with releases. CPI is due at 08:30 ET, as is retail sales. CPI is expected to come in at 0.3% for January, unchanged from the reading in December. Retail sales is expected to come in at 0.1% for January, versus a reading in December at 0.6%. Capacity utilization/industrial production will be reported at 09:15 ET.
Soiurce: EconomicCalendar
