Gold prices initially moved lower as the dollar gain traction, but the yellow metal rallied into the close of the trading session. The dollar reversed course initially rising following a stronger than expected US capital goods order report. Prices continue to trade sideways in a relatively tight range. US yields moved higher but are also rangebound.
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Gold prices tested lower levels but bounced into the close. Prices were still unable to recapture resistance near the 10-day moving average at 1,950. Target support is seen near the 50-day moving average at 1,876. Medium-term momentum remains negative as the MACD histogram is printing in the red with a sliding trajectory which points to lower prices. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The relative strength index has also turned higher reflecting decelerating negative momentum.
Durable Goods Orders Rise More than Expected
Durable goods orders surged 11.2% in July, compared with expectations of an increase of 4.3% and a 7.6% increase in June. New orders for capital goods slowed in July, suggesting the rebound in business investment could become more gradual. Orders for non-defense capital goods excluding aircraft, a proxy for business investment, increased 1.9% last month, according to the Commerce Department. Core capital goods orders jumped 4.3% in June. Expectations were for core capital goods to climb by 1.9% in July.