Gold prices rebounded from session lows but ended the week down 2.3%. During the week prices slipped through trend line support and poised to test lower levels. The dollar moved lower, but long-term US treasury yields moved higher which continued to weigh on the yellow metal. Treasury secretary Janet Yellen was on the tape on Friday saying that the US economy would need additional stimulus to get the economy on the right track.
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Gold prices were unchanged but during the week the yellow metal slipped through trend line support near $1,789 and poised to test the November lows at 1,764. A break of this level would lead to a test of the June lows at 1,667. Resistance is seen near the 10-day moving average at 1,811. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are oversold. The current reading on the fast stochastic is 12, well below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line the 9-day moving average of the MACD line).
Yellen Calls for more Stimulus.
Treasury Secretary Janet Yellen said a large stimulus package is still necessary to get the economy back to full strength, despite momentum suggesting that growth is off to a faster start than anticipated in 2021. Yellen said that the Biden administration’s $1.9 trillion proposals could help the U.S. get back to full employment in a year.