Gold Analysis Fundamental and Technical:
Gold prices recorded a sharp rise but continued to trade sideways in the downward tilted channel. US yields plummeted, which helped the euro put pressure on gold prices. The hedge fund dropped about 10% of open interest in futures and options according to the latest Commitment of Traders report. US housing starts and building permits were stronger than expected but failed to raise US yields or dollars.
Gold prices are continuously rising in the downward trending channel. Prices are squeezed between support near the 10-day moving average and the 100-day moving average. The 10-day moving average moved below the 100-day moving average indicating that a short-term downtrend is in place. Short-term momentum has come positive but has started decreasing rapidly. The sharp stochastic produced a crossover buy signal. Current reading at sharp stochastic is 35 faster than the oversold trigger level, but a drop in trajectory points for consolidation. The medium-term speed is negative for neutral as the MACD histogram is printing in red with an increasing trajectory that indicates consolidation.
Housing start rebound
American Housing starts in October and permits for future home construction jumped 12 years high. Housing has been growing for the fifth straight month. With single-family construction increasing by an annual rate of 1.314 million units to 3.8% last month.
The data for September revised to show home construction decreasing at a speed of 1.266 million units, with housing expected to start at a speed of 1.320 million units in October. Housing is up 8.5% on a year-to-year basis in October. Building permits increased 5.0% to a rate of 1.461 million units in October, the highest level since May 2007. The permits are operated by the single-family housing segment, which rose 3.2% to an 11-year high.