Gold Price Prediction – Prices Consolidate Despite Drop in U.S. Yields

Gold prices moved lower despite a declining dollar. The dollar moved sideways as U.S. yields broke down moving through key support levels and poised to test the 1.40% level for the 10-year benchmark Treasury yield.  Mortgage rates fell but the decline was not enough to buoy mortgage demand.

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Technical analysis

Gold prices declined on Tuesday, and continued to trade in a tight range despite declines in treasury yields. Short-term resistance is seen near the 10-day moving average at 1,896 .Target resistance is seen near the May highs at 1,916. Support is seen near an upward sloping trend line that comes in near $1,870. Short-term momentum continues to whipsaw after turning positive its reversed and turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned negative as  the MACD (moving average convergence divergence) as the MACD (moving average convergence divergence) index generated a crossover sell signal.

Mortgage Rates Fell

Mortgage rates fell but the decline was not enough to buoy mortgage demand. Total mortgage application volume decreased 3.1% for the week, according to the Mortgage Bankers Association’s index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 3.15% from 3.17%, with points decreasing to 0.34 from 0.39. While rates fell slightly, they were not as low as the record levels we saw last fall, and that is why refinancing demand is not responding.