Gold prices surged higher rising 1.3% and is poised to test higher levels. The surge came as the dollar tumbled and US yields moved lower. The EU finalized its recovery package which helped buoy the Euro paving the way for higher commodity prices. Metals as well as oil were buoyed by the decline in the greenback.
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Gold prices finished at 8-year highs and continue to trend higher. Target resistance is now seen near the August 2011 highs at 1,912. Support is seen near the 10-day moving average near 1,809. A break of this level could lead to a test of support near the 50-day moving average near 1753. Medium-term momentum has reversed and turned positive as the MACD (moving average convergence divergence) generated a crossover buy signal. The MACD histogram is printing in the black with an upward sloping trajectory points to higher prices. Short-term momentum is also positive as the fast stochastic moved higher and is printing a reading of 93 above the overbought trigger level of 80, which could foreshadow a correction. The RSI also surged higher reflecting accelerating positive momentum and is printing a reading of 73, above the overbought trigger level of 70 which could foreshadow a correction.
The EU finalized its Recover Package
The Final details showed EUR750 billion total that would consist of grants at EUR390 billion. France and Germany had wanted this amount at EUR500 billion. The money for the package will come out of the EU budget and loans will have to be repaid by 2058.
This article was originally posted on FX Empire
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