Gold prices were higher on Wednesday. The dollar moved lower and failed after attempting to rise early in the trading session. U.S. yields moved lower, which weighed on the greenback, paving the way for higher gold prices. In their Beige Book, the Federal Reserve said that businesses are facing rising material costs and higher wages.
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Gold prices moved higher but remain rangebound. The 10-day moving average recently crossed above the 200-day moving average recently, which shows that an upward trend is in place.Target resistance is seen near the 2021 highs at 1,960. Support is seen near the 10-day moving average at 1,894. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The RSI remains overbought printing a reading of 75, above the overbought reading of 70, which could foreshadow a correction. During the runup in prices in 2020, gold had an RSI reading of 89 as prices tested the 2,100 level. Medium-term momentum is turning negative MACD (moving average convergence divergence) index is printing in positive territory but about to generate a crossover sell signal.
The Federal Reserves Beige Book showed that businesses face rising costs on goods used to make their products, while they are offering higher wages and other incentives to get employees back to work. Economic growth increased at a “moderate pace” from early April to late May, the central bank said. Companies said increasing vaccination rates, helped with growth.
This article was originally posted on FX Empire
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