Gold Price Prediction – Despite Drop in Treasury Yields Gold Prices Edge Lower

Gold prices traded sideways and have been consolidating for 5-straight trading sessions. Despite a dip in U.S. Treasury yields, the yellow metal was unable to gain traction.  Prices have had a hard time making headway as the dollar edged higher. The 10-year Treasury yield dropped nearly 4-basis points which was the most significant drop in a week.

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Technical analysis

Gold prices continued to consolidate in a tight range. Prices tested support near the 10-day moving average at 1,732. Target resistance is now seen near the 50-day moving average at 1,793. Additional support is seen near the June lows at 1,670.   Short-term momentum is positive as the fast stochastic continues to accelerate higher.  The current reading on the fast stochastic is 79, just below the overbought trigger level of 80, which could foreshadow a correction. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the MACD line. The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

U.S. Home Sales Dropped More than Expected

According to the National Association of Realtors, U.S. Existing Home Sales dropped in February by a larger-than-expected 6.6% rate month over month. The annualized rate of 6.22 million units was 9.1% higher compared with February 2020. The supply of homes for sale fell 29.5% year over year, the largest annual decline ever, to 1.03 million homes. That tight supply continues to drive up home prices, which were 15.8% higher in February year over year. The median price of an existing home sold during the month was $313,000. That is the highest February price on record. Sales of homes priced above $1 million were 81% higher compared with a year ago.