Gold Prices Rise for the Week, but Face Headwinds with a Rising Dollar

Key Insights

• Gold prices moved higher
• The dollar continued to rally, weighing on Gold
• Gold prices in Euros closed higher for 5-consecutive days
• U.S. Treasury yields broke out

Gold prices continued to rally but did not have clear overhead resistance. The price of the yellow metal continued to rise as riskier assets as stocks remained under pressure. Additionally, the dollar moved higher as Treasury yields continued to trend upward. The 10-year yields continued to rise, pushing up mortgage rates to help bring down inflation.

The Commerce Department reported that February Wholesale Inventories were larger than expected on Friday. Wholesale inventories rose 0.6% in February compared to expectations that it would rise by 0.5%. The supply chain disruptions have led to restocking, but sales have not kept pace which is why inventories have increased.

Technical Analysis

Gold moved higher against the greenback and finished the week up nearly 0.9%. The momentum seems to be pointing to higher prices, but the rally in the greenback continues to weigh on forward progress. Prices sliced above short-term resistance near the 10-day moving average at 1,929. Resistance is seen near the March highs at 1,944.

Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is negative but decelerating, which points to consolidation. The MACD (moving average convergence divergence) histogram prints in negative territory with a rising trajectory.