Gold Price Prediction – Prices Attempt to Break Out as Gold Hits 7-year HighExisting Home sales tumble
Gold prices are attempting to break out and closed on Monday at a fresh-7-year high. As prices pushed above trend line resistance, gold implied volatility shot-up, rising to 21 and then eased into the close up 5% on the day to 19. The US dollar moved lower on Monday paving the way for higher gold prices. US yields edged lower following a softer than expected existing homes sales report.
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Gold prices moved higher closing above trend line resistance which comes in near $1,745, at a fresh 7-year high. This is now short term support. Additional support on the yellow metal is seen near the 10-day moving average at 1,731. Short term resistance is seen near the May highs at $1,765. Short term momentum has turned positive as the fast stochastic generated a crossover buy. The current reading on the fast stochastic is 87, above 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 MACD signal line (the 9-day moving average of the MACD line).
Existing Home Sales Drop
The National Association of Realtors reported that May’s existing-home sales tumbled falling 9.7% in May as compared with April, to a rate of 3.91 million units. Sales were down 26.6% annually. That is the largest annual decline since 1982 and the slowest sales pace since October 2010. These numbers are based on closed sales. The tight supply kept the pressure on home prices. The median price of an existing home sold in May was $284,600. That is an increase of 2.3% compared with May 2019 and the smallest annual rise since February 2012.