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David Becker
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Gold prices moved higher but the price action continued to form a sideways range.  The dollar moved lower along with US treasury yields which appear to have broken down below support near the 50-day moving average. A stronger than expected durable goods orders failed to lift yields which weighed on the greenback and paved the way for higher gold prices.

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Technical analysis

Gold prices moved higher but continue to enjoy a consolidative tone. Gold prices edged above resistance near the 10-day moving average at 1,906, which is now seen as support. Additional support is seen near the October lows at 1,872. Resistance is seen near the 50-day moving average at 1,919. Short-term momentum has whipsawed turning negative as the fast stochastic generated a crossover sell signal on the upper end of the neutral range. Medium-term momentum remains neutral as the MACD histogram prints in the black with a declining trajectory that points to consolidation.

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Durable Goods Order Rise More than Expected

Durable goods orders increased by 1.9% in September after rising 0.4% in August. Durable goods orders were driven by a 4.1% rebound in orders for transportation equipment, which followed a 0.9% decline in August. Orders for motor vehicles and parts recovered 1.5% after falling 4.1% in August. Orders for non-defense capital goods excluding aircraft, increased 1.0% last month. Data for August was revised higher to show these so-called core capital goods orders increasing 2.1% instead of 1.9% as previously estimated. Expectations were for core capital goods orders to increase by 0.5%.

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