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Gold Price Prediction for March 19, 2018

Gold prices moved lower sliding through support levels, as a stronger dollar eroded the value of the yellow metal. This comes despite a softer than expected housing starts report, which weighed on U.S. yields. Softer than forecast inflation data reported in the Eurozone on Friday, paved the way for lower gold prices.

Technicals

Gold prices edged through an upward sloping trend line which is now seen as short-term resistance near 1,316. Additional resistance is seen near the 10-day moving average at 1,323. Momentum has turned negative as the MACD (moving average convergence divergence) 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).

Housing Starts Declined

U.S. February housing starts declined 7.0% to 1.236 million, lower than forecast, after bouncing 10.1% to 1.329 million in January which was revised from 1.326 million. Weakness was in the multifamily sector which dropped 26.1%, which counters the January surge of 25.6% which was revised from 23.7%. Single family sales rose 2.9%% after the prior 3.5% increase which was revised from 3.7%. Regionally, starts declined in 3 of the 4 regions, with the Midwest the exception. February building permits slid 5.7% to 1.298 million from a revised 5.9% increase to 1.377 million.

Eurozone HICP inflation was revised down

Eurozone HICP inflation was revised down to 1.1% year over year with the final February numbers, from 1.2% year over year in the preliminary reading and versus 1.3% year over year in January. However, core inflation was confirmed at 1.0% year over year, unchanged from the preliminary reading and also steady versus January. Indeed, the breakdown confirmed that the main reason behind the dip in the headline rate was a sharp deceleration in the pace of food price inflation in February, which fell back to 1.0% year over year from 1.9% year over year in the previous month. Energy price inflation dipped to 2.1% year over year from 2.2% year over year, also adding to the decline in the headline rate.

The Bank of Canada reinforced the March announcement’s

The Bank of Canada reinforced the March announcement’s cautious and gradual tone via separate appearances by Deputy Governor Lane and Governor Poloz. The messaging of the duo was clear, as they repeated that the bank will continue to be cautious on future policy moves and dependent on incoming data, while rates are likely to move higher over time.

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This article was originally posted on FX Empire

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