Gold Prices Rally but Remain Rangebound
Key Insights
- Gold prices moved higher and continue to trade sideways
- The dollar moved higher against most major currencies
- U.S. Treasury yields pulled back from a multi-year high
Gold prices moved higher as yields pulled back from multi-year highs. Rising inflation has accounted for 300 basis points of Fed hikes by 2023. Weaker than expected New Home Sales were the catalyst that took some of the wind out of Treasury yields.
New home sales unexpectedly fell in February amid rising mortgage rates. According to the Commerce Department, New home sales decreased 2% to an annual rate of 772,000 units last month, declining for a second straight month. January’s sales pace was revised down to 788,000 units from the previously reported 801,000 units. Expectations were for new home sales to rise to 810,000 units.
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Technical Analysis
Gold moved slightly higher on Wednesday. Resistance is seen near the 10-day moving average at $1,943. Support is seen near the 50-day moving average at 1,882. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal.
The medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).