Gold Price Prediction – Prices Consolidate Despite Declining Yields

The gold price moved sideways but held support near the 200-day moving average. The dollar traded sideways U.S. Treasury yields declined, following softer than expected pending home sales. This week will be anchored by the employment report. Yields should continue to move lower following Powell’s signal to the markets that the Fed is likely going to remain dovish and will initiate the tapering of its bond purchase program sometime in 2021.

Tecnical analysis

Gold prices were lower on Monday after rising 1.7% for the week last week. Resistance is seen near the August highs at  1,831. Support is seen near the 10-day moving average near 1,792. Resistance on the yellow metal is seen near the Prices are overbought as the fast stochastic is printing a reading of 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 buy signal 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).

Pending Home Sales Slip

According to the National Association of Realtors, pending home sales to purchase previously owned homes fell 1.8% in July. The median price of an existing home was up 18% in July, according to the Realtors. Much of that was because there was far more activity on the higher end of the market, which skewed that median higher.