Gold Price Prediction – Prices Edge Higher as the Dollar Slips

Gold prices rallied Tuesday slightly as the dollar edged lower Treasury yields moved sideways. The markets are now focused on Friday’s Fed meeting in Jackson Hole, Wyoming, as many anticipate that the Fed will discuss possibly tapering bond purchases in September. New Home Sales continued to rise in July.

Technical analysis

Gold prices edged higher testing resistance near the 200-day moving average at 1,811. Support is seen near the 10-day moving average at 1,781. Short-term momentum has turned positive as the fast stochastic generated crossover buy signal.  Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This buy signal 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).Pries are overbought as the fast stochastic is printing a reading of 94, well above the overbought trigger level of 80 which could foreshadow a correction.

New Home Sales Rise

Sales of new U.S. single-family homes increased in July after three straight monthly declines. New home sales rose 1.0% to an annual rate of 708,000 units last month. June’s sales pace was revised up to 701,000 units from the previously reported 676,000 units. Expectations had been for new home sales, which account for a 10.6% of U.S. home sales, increasing to rate of 700,000 units in July. Sales dropped 27.2% on a year-on-year basis in July.