Gold Prices Slip as the Dollar Surges

Gold prices moved lower, pulling back to support. The dollar surged higher, and as Treasury yields surged. The U.S. interest rate markets are now pricing in 4-basis point hikes in 2022, with a 70% chance of a 4^th hike. The 10-year yield hit the highest level in more than 2-years above pre-pandemic highs. The German  ZEW survey showed a larger than expected improvement in expectations.

Technical Analysis

Gold prices moved lower on Tuesday. Support is seen near the 10-day moving average at 1,1811   Resistance is seen near the January highs at 1,829. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is positive as the MACD (moving average convergence divergence) index has generated a crossover buy signal. This situation 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 is printing in positive territory with a declining trajectory which points to consolidation.

German ZEW Improves

Germany’s ZEW survey showed that expectations improved but a more pessimistic assessment of the current situation. The ZEW measures of expectations rose to 51.7 from 29.9. It is the highest since last July. The current situation was marked down to -10.2 from -7.4.