Gold prices eased slightly on Wednesday after surging higher on Tuesday. This comes despite a pullback in the dollar index which retraced for a second consecutive trading session. Riskier assets continued to gain traction across the spectrum with stocks rising significantly for a second consecutive trading session after the US Senate agreed to a bill. US yields moved lower across the curve. US durable goods orders moved lower slightly less than expected. If the US dollar continues to retrace its recent gains gold should be able to climb higher and test upside resistance.
Trade gold with FXTM
Gold prices retraced some of Tuesday’s large gains which saw the yellow metal rise by 4.75%. Target resistance on the yellow metal is seen near the March highs at 1,700. Support is seen near the 10-day moving average at 1,540. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. The fats stochastic surged from a level of 13 last week to 58, which reflects accelerating positive momentum. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram also generated a crossover buy signal, moving through the zero-index level. The trajectory is upward sloping which points to higher prices.