Gold Price Prediction – Prices Consolidate Near Resistance as Housing Prices Rise

Gold prices consolidated on Tuesday after rallying for two consecutive trading sessions. The dollar moved higher helping to cap the upside movement in the yellow metal. US yields moved lower but seemed to consolidated following Fed Chair Powells commentary. The Fed Chair say that inflation and employment remain well below the Federal Reserve’s goals, meaning easy monetary policy is likely to stay in place. Despite a sharp rise this year in bond yields that has accompanied heightened concern over inflation, Powell said price pressures remain mostly muted.

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Technical analysis

Gold prices consolidated after testing resistance near the 10-day moving average at 1,816. Support is seen near the recent breakdown level which is an upward sloping trend line that comes in near 1,796. A break below this level again would potentially generate a test of the  November lows at 1,764. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices were oversold, but the fast stochastic has rebounded up to 40, from below the oversold trigger level of 20 just two days ago. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in the-red with a flat trajectory which points to consolidation.

Home Prices Rise

According to the S&P CoreLogic Case-Shiller Home Price Indices, home prices nationally increased 10.4% compared with December 2019, according to the S&P CoreLogic Case-Shiller Home Price Indices. That is the strongest annual growth rate in over six years, and a significantly stronger gain than in November, when prices were up 9.5%. It also ranks as one of the largest annual gains in the more than 30-year history of the index.