Gold Price Prediction – Prices Slide Despite Weaker Greenback

Gold prices moved lower on Monday despite a decline in the U.S. dollar. U.S. Yields moved sideways despite a softer than expected New Home Sales report. Most of the recent U.S. data has been softer than expected, which has weighed on yields. Despite this movement, the dollar has been strong, capping any upside in the yellow metal. U.S. Yields will likely experience some of their direction from riskier assets like stocks.

Technical analysis

Gold prices moved lower on Monday and continue to consolidate.  Support is seen near the 20-day moving average at 1,799.  Resistance is seen near the 50-day moving average at 1,833. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Medium-term positive momentum is decelerating. The MACD histogram is printing in positive territory with a declining trajectory which points to consolidation. The MACD line is poised to generate a crossover sell signal. Despite the sideways price action, gold continues to trade in a short-term uptrend.

New Home Sales Miss Expectations

According to the Commerce Department, New home sales dropped in June to the lowest level since April 2020. New single-family homes sales fell to an annualized rate of 676,000, 6.6% below May’s rate of 724,000, and 19.4% below the June 2020 level of 839,000. Expectations were for an increase by 3.4% in June to 795,000. Some of the headwinds were caused by the price of new homes, which continued to rise. The median price of a newly built home in June rose 6% from June 2020, and while the rise in prices is decelerating, it continues to add to robust levels of new home prices.