Key Insights
- Gold prices edged higher on Tuesday.
- The dollar recaptured its upward trend.
- Treasury yields rebounded across the curve.
Gold prices rebounded slightly on Tuesday, forming a doji day. A Strong greenback and higher yields capped gold price gains. Since gold is quoted in dollars, a stronger dollar generates headwinds for the yellow metal.
U.S. consumer borrowing surged again in April, following a record jump in March, driven by the continued strength of American consumers. According to the Federal Reserve borrowing through credit increased by $38.1 billion from March after a downwardly revised $47.3 billion gain in the prior month. Higher prices are not incorporated into the credit figures. The median forecast called for a $35 billion advance. The figures aren’t adjusted for inflation.
Technical Analysis
Gold prices rebounded from support near the 200-day moving average at 1,841. Short-term support is seen near the 10-day moving average of 1851. Resistance is seen near the 50-day moving average at 1,887.
Medium-term momentum turns positive as the MACD generates a crossover buy signal. This occurs as the 12-day moving average minus the 26-day moving average crosses below the 9-day moving average of the MACD line.
The MACD (moving average convergence divergence) histogram has a positive trajectory pointing to higher prices.
