Gold Price Prediction – Prices Rise as the Dollar Drop to a Fresh 2-year Low

Gold prices moved higher for a second consecutive trading session. The yellow metal was buoyed by a weakening dollar which broke down to a 2-year low. US yields moved lower, despite a stronger than expected US Housing Starts report. Walmart also reported excellent same-store sales but said sales declined as US consumers ran out of their stimulus checks.

Technical analysis

Gold prices rose nearly 1% on Tuesday after rising 2% on Monday and pushed through support which is now short-term resistance near the 10-day moving average at 1,988. Target support is seen near the 50-day moving average at 1,851. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is poised to turn positive as the MACD (moving average convergence divergence) index is about to generate a crossover buy signal. This 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 the red with a rising trajectory which points to consolidation.

Housing Starts Rise More than Expected

The commerce department reported that US Housing starts increased by 22.6% to an annual rate of 1.496 million units last month. Expectations were for Housing Starts to climb to a rate of 1.24 million units for July. The June figures were revised up to a 1.22 million-unit pace from the previously reported 1.186 million. #gold##USDollarWeakness##FX#

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