Gold prices moved lower on Tuesday, edging down as the dollar gained traction paving the way for lower gold prices. The dollar surged against most major currencies as the Euro moved lower ahead of the ECB meeting this Thursday. Yields on the German 10-year yield slipped as the US 10-year treasury yield rose pushing the yield differential in favor of the greenback. This came despite softer than expected US existing home sales report.
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Gold prices eased on Tuesday dipping to support near the 10-day moving average at 1,419. Resistance is seen near the July highs at 1,459. Prices continue to appear to be in a short term uptrend. Short term momentum on the other hand is negative as the fast stochastic recently generated a crossover sell signal. The current reading on the fast stochastic is 56, which is in the middle of the neutral range and reflects consolidation. Medium term momentum remains negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to consolidation. The relative strength index is also testing support and a breakdown would reflect accelerating negative momentum.
US Home Sales Fell More than Expected
US home sales declined by more than forecast in June as a dearth of homes pushed prices to a record high. According to the National Association of Realtors existing home sales dropped 1.7% to an annual rate of 5.27 million units last month. May’s sales pace was revised higher to 5.36 million units from the previously reported 5.34 million units. Expectations were for existing home sales to ease by 0.2% to a rate of 5.33 million units in June. The weakness in housing comes despite cheaper mortgage rates. Supply has continued to lag, as home builders have refrained from building lower-price homes because of land and labor shortages.
This article was originally posted on FX Empire
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