Gold Price Prediction – Prices Rebound as the Dollar SlipsUS yields continue to rise weighing on gold prices
Gold prices rebounded slightly on Wednesday following Tuesday’s slide US dollar moved lower but treasury yields continued to rise. Mortgage applications to purchase a home declined in the latest week despite lower mortgage rates. Gold was buoyed by riskier assets which rebounded on Wednesday following a flip flop by President Trump on a new stimulus bill. Gold implied volatility remains stable hovering near the 22 levels, well above the 2020 lows near 10, but well below the 2020 highs near 36.
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Gold prices moved higher rebounding slightly from Tuesday slide. Prices are hovering just under resistance near the 10-day moving average at 1,887. Additional resistance is seen near the 50-day moving average at 1,941. Support is seen near the September lows at 1,848. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal in the middle of the neutral range. Prices continue to remain rangebound.
New Mortgage Applications Fall
Applications for new home mortgages fell 2% for the week but were 21% higher year over year. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510,400 slipped to 3.01% from 3.05. In response, refinance application volume, which is most sensitive to weekly rate moves, rose 8% for the week and was 50% higher than a year ago, according to the Mortgage Bankers Association.