Gold Price Prediction – Prices Rally as the Dollar Drops

Gold prices rallied on Monday as the dollar dropped and Treasury yields moved sideways. The markets are now focused on Friday’s Fed meeting in Jackson Hole Wyoming, as many anticipate that the Fed will discuss possibly tapering bond purchases in September. Existing Home Sales continued to rise in July according to a report from the National Association of Realtors.

Technical analysis

Gold prices surged on Monday poised to test resistance near the 200-day moving average at 1,812. Support is seen near the 10-day moving average at 1,773. Short-term momentum has turned positive as the fast stochastic generated crossover buy signal.  Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This buy signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

Existing Home Sales Rise In July

According to the National Association of Realtors, existing homes rose by 2% in July to an annualized rate of 5.99 million units. Sales were 1.5% higher than in July 2020. That is the second straight month of gains after a pullback in the spring. Sales are likely improving due to rising supply. At the end of July, the inventory of homes stood at 1.32 million, down 12% from a year ago, but that is a smaller annual decline than in recent months. At the current sales pace, that represents a 2.6-month supply.