Gold prices continued to decline as the dollar gained traction in the wake of the Federal Reserve meeting. The U.S. 10-year yield popped 5-basis points while the 2-year yield rose 6-basis points. The Fed raised its view of growth and inflation. Housing starts rose 3.6% to an annual rate of 1.572 million units in May, but data for April was revised down to 1.517 million units from the previously reported 1.569 million units.
Gold prices moved lower declining sharply for a 3rd consecutive session and bouncing near support is seen near the 50-day moving average at 1,830. Short-term resistance is seen near the most recent trend breakdown at 1,872. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.
The Federal Reserve left interest rates unchanged as widely expected but increased its forecast for both GDP and inflation. However, the central bank gave no indication as to when it will begin cutting back on its aggressive bond-buying program. Though the Fed raised its headline inflation expectation to 3.4%, a full percentage point higher than the March projection.
This article was originally posted on FX Empire
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