Gold Price Prediction – Prices are Poised to Move as Volatility Contracts

Gold prices edged lower and continue to experience lackluster trading activity. Gold “at the money” implied volatility has eased to 17.8%, which is close to support near 17.5% and nearly a 6-month low. The dollar moved lower and yields moved higher but this failed to buoy the yellow metal or drive price action. According to the latest Case Shiller Home price report, US home prices continued to rise at a steady pace in November.

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Technical analysis

Gold prices edged lower on Monday and continued to experience lackluster price action. After forming a doji day on Monday, which is is a sign of indecision, prices edged lower, despite a declining greenback. Prices are sandwiched between support near the 10-day moving average at 1,850 and resistance, which is seen near the 50-day moving average at 1,858. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term negative momentum has decelerated as the MACD (moving average convergence divergence) histogram is printing in the red with a rising trajectory, which points to consolidation.

US Home Prices Trend Higher

The surge in home prices continues to trend higher, driven by demand and a record low supply of homes for sale. Prices nationally rose 9.5% in November, compared with November 2019, according to the S&P CoreLogic Case-Shiller Home Price Indices. That is the most substantial annual growth rate in over six years. The 10-city composite yearly increase in prices was 8.8%, up from 7.6% in October. The 20-city composite showed a 9.1% year-over-year gain, up from 8.0% in the previous month.