Gold Price Prediction – Prices Consolidate Following Monday’s Rally on Weak Home Sales
Gold prices moved in a very tight range, dipping slightly on Tuesday following Monday’s robust rally. The dip in gold came despite a selloff in the dollar which eased in tandem with U.S. Yields. Both the 10-year U.S. yield and the 2-year yield declined allowing the yield differential with the EU to move in the EU’s favor. U.S. Existing Home Sales declined in May, as high prices continue to impact sales.
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Technical analysis
Gold prices nearly unchanged on Tuesday after a strong rallyh on Monday. Prices remain well above support near the and upward sloping trend line that comes in near $1,730. Resistance is seen near the 10-day moving average at 1,830. The 10-day moving average has crossed below the 50-day moving average which means that a short-term downtrend is now in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold. The current reading on the fast stochastic is 12, below the oversold trigger level of 20 which could foreshadow a correction. 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. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.
Existing Home Sales Slip
U.S. Existing homes dropped for the fourth straight month due high prices and a tight market. According to the National Association of Realtors, existing-home sales fell 0.9% in May to an annualized rate of 5.8 million units. That is the fourth straight month of declines. The 5.8 million rate is modestly above pre-pandemic levels. Sales were 44.6% higher from the same period a year ago, but that is compared to May 2020 as the pandemic accelerated.