Gold prices edged lower Monday consolidating near 9-year highs the dollar moved higher along with US yields. Gold implied volatility dropped declining from 20.5, down to 19, which is a sign of complacency and likely means gold is poised to grind higher. Gold prices continue to benefit as a safe haven asset, following news that COVID continues to spread throughout the United States at an accelerating rate. Pending home sales surged higher as low-interest rates made mortgage rates very attractive.
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Gold prices edge lower and continue to consolidate after breaking out to fresh 8-year highs seen last week. Support is seen near the 10-day moving average at 1,750, and then the 50-day moving average at 1,723 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 positive as the fast stochastic generated a crossover buy signal in overbought territory. The current reading on the fast stochastic is 87, 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.
Pending Home Sales Surge
Pending home sales surged 44.3% in May compared with April, according to the National Association of Realtors. That is the largest one-month jump in the history of the survey. It beat expectations of a 15% gain. Sales were still 5.1% lower compared with May 2019, however. Pending sales measure signed contracts on existing homes.
This article was originally posted on FX Empire
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