Gold prices consolidate as the dollar consolidated and US yields moved higher. This rise in yields came despite a larger tha expected federal budget. Prices continue to trade in a very tight range while momentum has consolidated.
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Technical analysis
Gold prices consolidate below resistance near the 10-day moving average at 1,829. Prices pushed through support and are targeting an upward sloping trend line that comes in near 1,788. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is flat as the MACD (moving average convergence divergence) index histogram is printing near the zero index level with a flat trajectory, which points to consolidation.
The Federal Budge Estimates Surged
The federal budget deficit is projected to total $2.3 trillion in the 2021 fiscal year, a drop from last year but well ahead of anything the U.S. had seen prior to the Covid-19 pandemic, according to the Congressional Budget Office. That total does not include the $1.9 trillion in relief spending that President Joe Biden has proposed because the ultimate size of the package has not been determined.
