Yahoo Finance Gold Price Prediction – Prices Consolidate Following Robust US Home Sales
Gold prices traded sideways and continued to hover in a relatively tight range. Gold prices were buoyed by a higher US dollar and lower US yields. Prices continue to consolidate. Traders are focused on the dollar as well as geopolitical events. The current virus in China has caught the market’s attention and has been a minor tailwind for gold prices.
The last time the world saw this kind of virus in Asia, known as SARS, gold prices rallied more than 27% over the next 12-months from March 2003 to March 2004. The spread of a new illness that can be pass from person to person hammered Asian stock prices helping to buoy gold. The first case of the coronavirus originating in China can be confirmed in Washington State. The BOJ had its monetary policy decision keeping rates unchanged.
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Technicals
Gold prices moved sideways on Wednesday and continue to form a cup and saucer continuation pattern. This is generally a pause that refreshes higher. Short-term support is seen near the 10-day moving average at 1,555. Resistance is seen near the January highs at 1,611. Short-term is negative to neutral as the fast stochastic heads lower after reversing a buy signal. The trajectory of the fast stochastic is flattish, which also means potential consolidation. The relative strength index (RSI) is moving sideways to lower also reflecting consolidation. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell 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 declining trajectory which points to lower prices.
US home sales rose in December. Sales of previously owned homes increased by 3.6% in December compared with November to reach a seasonally adjusted annual rate of 5.54 million, according to the National Association of Realtors. On a year over year basis, December sales of existing homes were up 10.8%, through December 2018.
This article was originally posted on FX Empire
