Gold Price Prediction – Prices Surge on Dollar WeaknessPending Home sales drop
Gold prices surged higher as the dollar tumbled following a softer than expected Q2 GDP report. Since gold is quoted in dollars, a weaker greenback generally leads to higher gold prices. The GDP report was the first look at growth in the U.S., but it showed the lack of inventory restocking, which record-high shipping rates have hampered. This report followed the Fed’s decision on Wednesday to keep interest rates unchanged. GDP accelerated 6.5% on an annualized basis, less than the 8.4% expected by economists. The result was slightly better than the 6.3% gain in the first quarter, which was revised narrowly.
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Gold prices surged higher on Thursday, increasing slightly more than 1.25%. Support is seen near the 10-day moving average at 1,808. Momentum is positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram also generated a crossover buy signal pushing through the zero-index with a rising trajectory which points to higher prices.
Pending Home Sales Fall
According to the National Association of Realtors, pending home sales fell 1.9% in June. The pending home indicator is a measure of contracts signed which is a future gauge of existing home sales. High existing home sale prices continue to generate a choppy sales market. Prices in May were up nearly 17% compared with May 2020, according to the latest reading from the S&P Case-Shiller national home price index.