Gold prices moved higher on Thursday but still, remain in a tight range. Prices have been buoyed by political issues in the UK as Parliamnet narrowly voted to block a no-deal Brexit on Wednesday evening. Prices made a lower low and a lower high which is a sign of a down trend. Prices also appear to be forming a topping pattern. US yields pulled back but sterling and the euro moved lower against the greenback keeping gold prices rangebound.
Gold prices moved sideways consolidating in a tight range and continuing to form a topping pattern. Prices appear to be forming a head and shoulder reversal pattern, with support seen near the neckline which is an upward sloping trend line that comes in near 1,285. Resistance is seen near the 10-day moving average at 1,300. The 10-day moving average recently crossed below the 50-day moving average which means a short-term down trend is in place. Momentum remains negative as the MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices and accelerating negative momentum. Short term momentum is turning positive as the fast stochastic recently generated a crossover buy signal. The current reading of 17, is below the oversold trigger level of 20 and could foreshadow a correction.
Parliament Blocks No-Vote Brexit
The UK as Parliamnet narrowly voted to block a no-deal Brexit on Wednesday evening. The vote to wait passed 313-312 on a single vote blocked PM May’s plan to push through an exit which she could then negotiate. Prime Minister May has reached across the aisle to come up with an acceptable deal. It now appears that a no-deal Brexit is completely off the table and its back to the drawing board. A softer version with a deal between the UK and EU will likely move forward but will be delayed.