Gold prices drop as the dollar gains propulsion
Gold prices moved lower as the dollar moved higher and U.S. yields declined.
The Greenback rose as riskier assets continued to trade under pressure. U.S. Q2 GDP came in stronger than expected while the U.S. existing home sales fell. U.S. consumer confidence came in weaker than expected as the spread of the coronavirus continued to erode growth.
Gold prices moved lower but continue to trade in a tight range. Support is near the 10-day moving average near 1,856, with resistance seen near the 10-day moving average at 1,869.
Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices have been moved from overbought to the neutral range.
The current reading on the fast stochastic is 68, down from 83. Medium-term momentum is positive to neutral as the MACD (moving average convergence divergence) histogram prints in the black with a flattening trajectory, which points to consolidation.
According to the National Association of Realtors, existing-home sales fell 2.5% on a month-to-month basis an annualized rate of 6.69 million units. Sales were a healthy 25.8% higher year over year.
There were just 1.28 million homes available for purchase at the end of November. That is down 22% from a year earlier and represents a 2.3-month supply at the current sales pace.
The median price of an existing home sold in November was $310,800, a 14.6% increase from November 2019.
