Yahoo Finance Gold Price Prediction – Soft Housing Data is Offset by Weak UK Inflation Keeping Gold Steady
Gold prices edged lower and continued to trade sideways forming a bull flag pattern that is a pause that refreshes. The dollar gained traction against the Euro and the Pound despite softer than expected housing starts numbers. The weaker than expected US data was countered by softer inflation data in the UK and EU.
Technical Analysis
Gold prices continued to form a bull flag pattern. After breaking out last week prices have moved sideways. Support on the yellow metal is seen near the 20-day moving average at 1,202. Resistance is seen near the October highs at 1,233. The 20-day moving average recently crosses above the 50-day moving average which means that a short-term up trend is now in place. Momentum remains positive as the MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices for gold. Short-term gold is oversold as the fast stochastic is printing a reading of 84, above the oversold trigger level of 80 which could foreshadow a correction.
Housing Starts Disappoints
US Housing starts dipped in September driven by declining construction in the South. Most of the decline was due to Hurricane Florence. The commerce department reported that housing starts fell 5.3% to an annual rate of 1.2 million units in September. August data was also revised lower to a rate of 1.27 million units down from 1.282 million units. Starts in the South dropped nearly 14% in September, which was the largest decline since October 2015. Building permits fell 0.6% percent to a rate of 1.241 million units in September, according to the Commerce Department. That was the second straight monthly decline in permits and suggested homebuilding is likely to remain tepid. Expectations were for housing starts to dip to 1.22 million units last month. Housing starts remain robust in the North east where the surged 29%. Starts in the west were solid rising 6.6%, while they were soft in the mid-west dropping 14%.
This article was originally posted on FX Empire
