Gold Price Prediction – Prices Slip as the Dollar Surges

Gold prices moved lower as the dollar surged higher despite a dip in U.S. Treasury yields.  Since gold prices are quoted in U.S. dollars, a stronger greenback will generally weigh on the value of the yellow metal. Prices have had a hard time making headway as the dollar edged higher. The 10-year Treasury yield dropped another 4-basis points following a substantial decline on Monday.

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Technical analysis

Gold prices moved lower after a week of consolidation. Prices slide through support, which is now resistant near the 10-day moving average at 1,733. Target resistance is now seen near the 50-day moving average at 1,790. Additional support is seen near the June lows at 1,670.   Short-term momentum has flipped and is now negative as the fast stochastic generated a crossover sell signal, just above the oversold trigger level, and has now moved lower.  The current reading on the fast stochastic is 76, just below the overbought trigger level of 80, foreshadowing a correction. Medium-term momentum has turned positive. The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Home Sales Drop

Sales of new U.S. single-family homes fell to a nine-month low in February amid bitterly cold weather, and expensive lumber and rising mortgage rates could cool the housing market this year. New home sales plunged 18.2% to an annual rate of 775,000 units last month. Expectations had been for new home sales would decline 6.5% to a rate of 875,000 units in February.