Advertisement
Advertisement

Gold Price Prediction – Prices Rebound as the Dollar Slips

By:
David Becker
Published: Oct 7, 2020, 17:37 GMT+00:00

US yields continue to rise weighing on gold prices

Gold Price Prediction – Prices Rebound as the Dollar Slips

Gold prices rebounded slightly on Wednesday following Tuesday’s slide US dollar moved lower but treasury yields continued to rise. Mortgage applications to purchase a home declined in the latest week despite lower mortgage rates. Gold was buoyed by riskier assets which rebounded on Wednesday following a flip flop by President Trump on a new stimulus bill. Gold implied volatility remains stable hovering near the 22 levels, well above the 2020 lows near 10, but well below the 2020 highs near 36.

Trade gold with FXTM

Regulated By:FCA, CMA, FSCM
Headquarters:Cyprus
Foundation Year:2011
Min Deposit:$200
Online Forex/CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading Online Forex/CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. It is the responsibility of the Client to ascertain whether he/she is permitted to use the services of Exinity Capital East Africa Ltd based on the legal requirements in his/her country of residence.
Official Site:
Demo Account:Open Demo Account
Max Leverage:1:30 (FCA), 1:2000 (CMA), 1:3000 (FSCM)
Publicly Traded:No
Deposit Options:Wire Transfer, Credit Card, Skrill, Neteller, PerfectMoney, Local Transfer, FasaPay, , , , Debit Card,
Withdrawal Options:Wire Transfer, Credit Card, Skrill, Neteller, Debit Card, Local Transfer, FasaPay, , , PerfectMoney, ,
Products:Currencies, Commodities, Indices, Stocks, Crypto
Trading Platforms:MT4, MT5,
Trading Desk Type:No dealing desk
OS Compatability:Desktop platform (Windows), Desktop platform (Mac), Web platform
Mobile Trading Options:Android, iOS

Technical analysis

Gold prices moved higher rebounding slightly from Tuesday slide. Prices are hovering just under resistance near the 10-day moving average at 1,887. Additional resistance is seen near the 50-day moving average at 1,941.   Support is seen near the September lows at 1,848. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) generated 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. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal in the middle of the neutral range. Prices continue to remain rangebound.

New Mortgage Applications Fall

Applications for new home mortgages fell 2% for the week but were 21% higher year over year. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510,400 slipped to 3.01% from 3.05. In response, refinance application volume, which is most sensitive to weekly rate moves, rose 8% for the week and was 50% higher than a year ago, according to the Mortgage Bankers Association.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

Advertisement