Comex Gold

Gold Price Prediction – Gold Consolidates Creating Bear

Gold prices are trading under pressure on Monday as a stronger dollar paved the way for lower gold. This comes despite a softer than expected U.S. existing home sales report, which could have taken some of the steam out of the dollar. Gold has not benefitted from trade tariffs, and have been eroded by gains in the greenback. Yields in the U.S. are rising back toward the 3% level for the 10-year yield, and despite President Trumps dissatisfaction with higher rates, this is driving up the value of the dollar and generating a headwind for gold prices.

Techicals

Gold prices moved lower on Monday and are trading sideways forming a bear flag pattern, which is a continuation pattern that is a pause that refreshes lower. Resistance on the yellow metal is near the former December lows that coincides with the 10-day moving average at 1,236. Target support on gold prices is seen near the July 2017 lows at 1,204.  Momentum is mixed, while the fast stochastic generated a crossover buy signal in oversold territory, pointing to upward momentum, the MACD histogram is printing in the red with a declining trajectory which points to lower prices.

Existing Home Sales Unexpected Declined in June

The National Association of Realtors reported that existing home sales fell 0.6% to an annual rate of 5.38 million units last month. May’s sales pace was revised down to 5.41 million units from the previously reported 5.43 million units. U.S. home sales decline for the 3rd consecutive month in June as there is a shortage of inventories that have led to increases in home prices.  Buyers are instead renting properties and are sitting on the sidelines waiting for home prices to fall.  Expectations were for home sales to gain 0.5% to 5.44 million units in June.  While sales were higher in the Northeast and mid-west the West saw large declines. The majority of the sales that occur in the United States are existing home sales, which dropped nearly 2.2% year over year in June.