Gold Price Prediction – Prices Rise on Dollar Weakness

Gold prices were buoyed by a decline in the greenback, in the wake of the Fed’s decision and despite mixed economic data. U.S. Yields were lower, as the market priced in the Fed’s 3-rate hikes described in its new interest rate outlooks. The Fed also thinks inflation will moderate in 2022, down to 2.2% from 5.3% on average. Housing Starts were stronger than expected

Technical Analysis

Gold prices rallied hard as the dollar eased. Resistance is seen near the 50-day moving average at 1,797. Support is seen near the 10-day moving average at $1,781.  Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Housing Starts Rise More than Expected

Housing starts in November rose 11.8% from the previous month to 1.68 million, while building permits climbed 3.6% to 1.71 million. Both numbers were well above respective estimates of 1.56 million and 1.66 million. Builder sentiment in the single-family housing market rose one point to 84 in December, on the National Association of Home Builders/Wells Fargo Housing Market Index.