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Gold Price Prediction – Prices Ease as the Dollar Continues to Rally

Gold prices were heavy and continued to trading under pressure as the dollar rallied despite a decline in US yields. Stronger than expected US existing home sales helped buoy the greenback which paved the way for lower gold prices. The dollar continued to benefit from a safe-haven bid, which has not been the case for gold prices.

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Technical analysis

Gold prices consolidated after breaking down on Monday. Resistance is seen near the 50-day moving average at 1,939. Target support is the August lows at 1,862. The 10-day moving average is poised to cross through the 50-day moving average which would mean a short-term downtrend is in place. Medium-term 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). Short-term momentum is flat to negative as the fast stochastic recently generated a crossover sell signal. The relative strength index is moving lower reflecting accelerating negative momentum.

Existing-Home Sales Rise

US existing home sales increased by 2.4% to a rate of 6 million units, according to the National Association of Realtors. Sales were 10.5% year over year. This is the highest sales pace since December 2006. Sales were weighed on by the lack of inventory.  There were 1.49 million homes for sale at the end of August, down 18.6% year over year. This elevated the median price of an existing home sold in August to a record high of $310,600. That is up 11.4% annually.

This article was originally posted on FX Empire

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