Gold prices surged higher as the dollar eased and yields slipped. The dollar index pulled back, which helped buoy the yellow metal. Despite hitting a pre-pandemic high on Tuesday, the long end and short end eased, allowing the dollar to consolidate. U.S. Housing starts hit a 9-month high.
Gold prices moved surged higher on Wednesday. Support is seen near the 10-day moving average at 1,1815 Resistance is seen near the November highs at 1,877. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought as the fast stochastic is printing a reading of 97, above the overbought trigger level of 80. Medium-term momentum is positive as the MACD (moving average convergence divergence) index has generated a crossover buy signal. This situation 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 is printing in positive territory with a declining trajectory which points to consolidation.
Homebuilding Surges to a 9-month High
Housing starts rose 1.4% to a an annual rate of 1.702 million units last month, the highest level since March. Data for November was revised slightly lower to a rate of 1.678 million units from the previously reported 1.679 million units. Housing starts totaled 1.595 million in 2021, up 15.6% from 2020. Expectations were for housing starts to fall to a rate of 1.650 million units.