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Gold Price Prediction – Prices Edge Higher Rising 1.3% for the Week

David Becker

Gold prices edged higher on Friday as the dollar was unchanged forming a doji day. Gold prices continue to benefit as a safe haven asset, following news that Texas announced that it would roll back some of its reopening. US stocks moved lower as the fear of the spread of COVID continued to weigh on riskier assets. This buoyed US yields and paved the way for higher gold prices.

Technical Analysis

Gold prices edge higher and continue to consolidate after breaking out to fresh 7-year highs earlier in the week. For the week the yellow metal rallied 1.3%. Support is seen near the 10-day moving average at 1,720, and then the 50-day moving average at 1,746 which was tested today and rejected. Resistance is seen near the June highs at 1,779 and then the August 2012 highs at 1,791. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal in overbought territory. The current reading on the fast stochastic is 84, above the overbought trigger level of 80 which could foreshadow a correction. Medium-term momentum remains positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.

Mortgage Forbearance Rise

Borrowers that have delayed their monthly mortgage payments due to COVID rose sharply once again. According to Black Night Data, the number of active forbearance plans rose by 79,000 in the past week, erasing roughly half of the improvement seen since the peak of May 22. By comparison, the number of borrowers in forbearance plans fell by 57,000 the previous week. Increases happened every day for the past five business days. Approximately 4.7 million homeowners were in forbearance plans, allowing them to delay their mortgage payments for at least three months. This represents 8.8% of all active mortgages, up from 8.7% last week.

This article was originally posted on FX Empire

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