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Thursday, September 23, 2021

Gold Prices Broke Out


Gold prices broke out as the benchmark 10-yr Treasury yield fell to new lows at 0.897, as investors baked in a 50-bpts interest rate cut when the Fed meets again in 2-wks. This follows the emergency interest rate cut the Fed announced Tuesday, which cut 50-bpts from the Fed Fund rate.

USD continued to trend lower, breaking down and poised to test the Y 2020 lows. With gold prices in USDs and rates moved down, the safe-haven status of gold is gaining traction.

Gold prices rose about 2% and up more than 5% on the week. The precious Yellow metal settled at a 7-yr high. Prices are poised to test the February intra-day highs at 1,690. Short term support is seen near the 10-Day MA at 1,634. Additional support is seen near the 50-Day MA at 1,577.  

Medium-term momentum has turned positive.

The MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line crosses above the MACD signal line. The MACD histogram generated a crossover buy signal, crossing through the Zero-index level. The index has an upward sloping trajectory which points to accelerating positive momentum.

The fast stochastic also generated a crossover buy signal which reflects accelerating positive momentum.

Prices can continue to rally as the fast stochastic is printing a reading of 67 short of the overbought trigger level of 80.

Stay tuned…

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