Gold Price Prediction – Prices Dropped as the Dollar Continues to Gain Traction
Gold prices broke down as the dollar continued to trade higher despite subdued US yields. Stronger than expected US mortgage applications buoy the greenback which paved the way for lower gold prices. The dollar continued to benefit from a safe-haven bid, which has not been the case for gold prices.
Trade gold with FXTM
Gold prices broke down on Wednesday and are poised to test trget support is the August lows at 1,862. Resistance is seen near the 10-day moving average at 1,932. The 10-day moving average crossed through the 50-day moving average which means a short-term downtrend is in place. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). Short-term momentum is negative as the fast stochastic recently generated a crossover sell signal. The relative strength index is moving lower reflecting accelerating negative momentum.
Mortgage Applications Continue to Rise
The Mortgage Bankers Association’s reported that total mortgage application volume increased 6.8% last week. Refinance demand surged up 9% for the week and 86% annually. The refinance share of mortgage activity increased to 64.3% of total applications from 62.8% the previous week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510,400 increased to 3.10% from 3.07%.