Gold prices rose on Monday as geopolitics continued to dominate the landscape. After a vote in the Iraqi parliament, President Trump in the Middle East told Iraq that US troops would be thrown out of the country. The loss of a US-built stronghold in Iraq would create additional chaos in the region. Markit reported the last Eurozone PMI services in December, which were stronger than expected and helped boost the euro and pave the way for higher gold prices.
Technical analysis :
Gold broke through the September highs at 1,556 to hit 1,586 before closing the day’s highs. The weekly gold price charts have broken out. The target resistance is now seen near the highs in October 2012 at 1,795. Short-term support is seen near the September high of 1,556 and the 10-day average at 1,507. The 10-day moving average has recently exceeded the 50-day moving average, indicating that there is a short-term uptrend. The daily RSI (relative strength index) now reports a value of 85, which increases from 82 and reflects an accelerating positive dynamic. This almost corresponds to the high pressure of the RSI of 87 in 2019. The RSI is above the overbought trigger level of 70 and also indicates a possible future correction. Weekly momentum is positive as the Moving Average Convergence Divergence (MACD) index has generated a crossover buy signal. This happens when the MACD line (the 12-week moving average minus the 26-week moving average) crosses the MACD signal line (the 9-week moving average of the MACD line). Markit announced its latest services for the Eurozone in December and the composite PMI values were higher than expected. The headline for the services was 52.9 and 50.9 for the composite. Germany has improved significantly compared to the flash measurement. Germany also posted strong retail sales in November, up 2.1% on the previous month. 1.0% expected.