Gold Prices Fall as Yields Increase

Gold prices held steady on Tuesday as the dollar strengthened, putting downward pressure on the yellow metal. The dollar strengthened as the yield differential remained in favor of the dollar. Riskier assets increased in value, removing some of the safe-haven bid from gold prices.

The Commerce Department said Tuesday that housing starts grew unexpectedly by 0.3 percent last month to a rate of 1.793 million units on an annual basis. February data has been revised upward to 1.788 million units from 1.769 million units previously reported. Housing starts were expected to decline to 1.745 million units. Permits for future home construction increased by 0.4 percent last month to 1.873 million units.

Technical Evaluation

Tuesday's gold prices plummeted. Prices appear to be clinging to support near the 10-day moving average of 1,953. Near the April highs of 1,999, resistance is present.

Momentum has shifted negative in the short term as the Fast Stochastic generated a crossover sell signal. Prices are excessively high. The fast stochastic slid from above the overbought trigger level of 80, indicating that negative momentum is intensifying.

The medium-term momentum is positive, as the MACD histogram recently issued a crossing buy signal. The MACD histogram's trajectory is decelerating, indicating consolidation.