Gold Price Prediction – Prices Rebound But Remain Rangebound

Gold prices edged higher but still were unable to pierce through resistance.  The dollar moved lower as yields pulled back, which put upward n the yellow metal. This week, higher than expected retail sales and robust import prices along with better than expected industrial production put upward pressure on the dollar.

Technical analysis

Gold prices moved higher and consolidated but were unable to break through trend line resistance near a downward sloping trend line that comes in near 1,866. Target resistance is seen near the June highs at 1916. Support is seen near the 10-day moving average at 1,842. The 10-day moving average has crossed above the 50-day moving average, which means a short-term uptrend is now in place. Prices are overbought as the fast stochastic is printing a reading of 90, well above the overbought trigger level of 80. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Mortgage Applications Rose

Mortgage applications to purchase a home, rose 2% for the week but were 6% lower than the same week one year ago. As a result, refinance demand fell 5% for the week and was 31% lower than the same week one year ago. Refinance applications have dropped in seven of the past eight weeks.