Gold prices moved higher and continued to trend upward as cryptocurrency exchange rates tumbled and the dollar declined. US yields were nearly unchanged on the session despite strong demand for higher prices mortgage rates as sky-high prices continue to drag in consumers.
Trade gold with FXTM
Gold prices moved higher but the momentum reaccelerated and the 10-day moving average came cloer to crossing above the 200-day moving average. Target resistance is seen near the Fibonacci retracement level of 61.80%, which is seen near 1,902. Support is seen near the 200-day moving average at 1,847. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 95, above the overbought trigger level of 80, foreshadowing a correction. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.
Higher Home Prices are Increasing Mortgage Sizes
Record high home prices mean demand for ever bigger mortgages, but those prices may also be causing a pullback in homebuying overall. According to the Mortgage Bankers Association’s index, mortgage applications to purchase a home fell 4% last week compared with the previous week. Volume was just 2% higher than the same week one year ago, when the housing market was just starting to come back after the pandemic shut it down. The extreme shortage has prices continuing to climb at the fastest pace in over 15 years, and as a result, average purchase loan balances are rising in tandem.