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David Becker
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Gold prices consolidated attempting to move higher but unable to gain any traction and closing near the open at the session’s lows. The price action with a doji day finish and a long upper wick shows a rejection of higher prices. The U.S. 10-year yield continued to move lower, but the 2-year remains firm. The dollar index rallied sharply and finished the week up nearly 2% which paved the way for lower gold prices.

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Technical analysis

Gold prices were nearly unchanged but the failure to rise should be seen as a negative. Prices are poised to test the November 2020 lows of 1,764, and then the weekly upward sloping trend line that comes in near 1,730. Resistance is seen near the 50-day moving average at 1,830.  Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Prices are oversold. The current reading on the fast stochastic is 3, below the oversold trigger level of 20 which could foreshadow a correction. The RSI is also oversold printing a reading of 28, below the oversold trigger level of 30 which could foreshadow a correction. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.

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Bullard See Rate Hike in 2022

CNBC is reporting that St. Louis Federal Reserve President James Bullard told the media outlet that he sees an initial interest rate increase in late-2022 as inflation picks up faster than previous forecasts had anticipated. Bullard at several points described the Fed’s moves this week as “hawkish,” or in favor of tighter monetary policy than what has prevailed since the onset of the Covid-19 pandemic.

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