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David Becker
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Gold prices edged lower and are consolidating just above support levels. The veterans day Holiday in the US helped keep trading in the yellow metal light. The 10-year US treasury yield continued to rise increasing slightly. The dollar moved higher putting downward pressure on gold prices. EU officials reached a compromise on their 7-year budget, helping to pave the way for potentially stronger growth.

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Technical analysis

Gold prices edged lower near support levels which coincides with the September lows at 1,848. Resistance is seen near the 10-day moving average at 1,895 and then the 50-day moving average at 1,908. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. The fast stochastic has accelerated lower and is currently printing a reading of 15, 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) 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).

EU officials have reached a compromise on the size of its next seven-year budget. Last week, there was a compromise additionally.  Together, these two agreements will account for EUR1.8 trillion of spending, with EUR750 billion earmarked for the recovery fund.

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