Gold prices moved higher as the dollar continued to ease, and an Iranian-backed militia tried to storm the US Embassy in the Iraqi capital Tuesday. This comes from an intensifying backlash against the US after it conducted deadly strikes on the group. US short term yields moved lower weighing on the interest rate differential, which put downward pressure on the greenback and paved the way for higher gold prices.
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Gold prices moved higher pushing through the November highs at 1,516, which is now seen as short-term support. Target resistance is seen near the late September highs at 1,535. Support is seen near the 10-day moving average near 1,495. Additional support is seen near the 50-day moving average at 1,479. The 10-day moving average recently crossed above the 50-day moving average which shows that a short term up trend is now in place. Short term momentum has slowed and now has a neutral trajectory after generating a buy signal and a sell signal. The fast stochastic is printing a reading of 95, well above the overbought trigger level of 80, which could foreshadow a correction.
The RSI (relative strength index) is now printing a reading of 75, rising from 73 which reflects accelerating positive momentum. The RSI is above the overbought trigger level of 70, and also points to a potential future correction. Medium-term momentum is positive as the MACD histogram prints in the black with an upward sloping trajectory which points to higher prices.
Geopolitics Lifts Gold
Iranian funded militia tried to storm the US Embassy in the Iraqi capital, in an intensifying backlash against the US. after it conducted deadly strikes on the group. Video and photos from the scene showed the blast walls surrounding the compound were on fire. The protesters flew the flag of Kataib Hezbollah, which the U.S. has blamed for a recent spate of rocket attacks targeting Iraqi base.
This article was originally posted on FX Empire
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