Gold Price Prediction – Prices Slide as Treasury Yields Surge

Gold prices consolidated, moving lower on Tuesday as the dollar continued to consolidate. U.S. Treasury yields surged higher, putting downward pressure on the Yellow metal. This movement followed a more robust than expected home price report, announced by S&P on Tuesday.

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Technical analysis

Gold prices moved lower on Tuesday and continued to trade sideways.  The upward trend remains in place as prices head for resistance near a Fibonacci retracement level of 38.2%, which is seen near 1,828. Target resistance on the yellow metal is seen near the February highs at 1,855. Support is seen near the 10-day moving average at 1,774. The 10-day moving average has crossed above the 50-day moving average which means that a short-term uptrend is now in place. Short-term momentum reversed and turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 73, down from 76, which reflects accelerating negative momentum. 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 a declining trajectory which points to consolidation.

Home Prices Accelerate

Home price gains continue to accelerate as tight supply and strong demand led to bidding wars. Nationally, prices in February rose 12% year over year, up from 11.2% in January, according to the S&P CoreLogic Case-Shiller home price index. The 10-city composite rose 11.7% annually, up from 10.9% in January. The 20-city composite gained 11.9%, up from 11.1% in the previous month. All the gains were in the double digits, except Chicago and Las Vegas.