Gold prices moved higher and are up for the week. The move-in gold came as the dollar declined and US yields rebounded sharply. The rise in US Yields seems to be a relief rally trade. This came on the heel of a better-than-expected Wholesale Inventories report.
Technical analysis
Gold prices moved higher as the dollar declined. Support is seen near the 10-day moving average near 1,788. Resistance is seen near the 50-day moving average at 1,835. Short-term momentum has flip-flopped turning positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has shifted positively 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 is printing in positive territory with an upward sloping trajectory which points to higher prices.
Inventories Rose
Total inventories of wholesale merchants were up $709.8bn at the end of May, a spike of 1.3% from the revised April level. Including manufacturers’ sales branches and offices, the monthly survey conducted by the US Census Bureau showed total inventories were up 8.2% from the revised May 2020 level. The April 2021 to May 2021 percent change was revised from the advance estimate of up 1.1% to up 1.3%.
