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Gold Price Prediction – Prices Drop Accelerating Downtrend as Yields Rise

David Becker
·2 min read

Gold prices continued to break down on Tuesday after collapsing on Monday US yields continued to back up. The decline in the yellow metal occurred despite a falling dollar. Generally, a declining greenback bodes well for gold prices. Better than expected US home prices continued to buoy US yields which paved the way for lower gold prices.

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Technical analysis

Gold prices broke down on Tuesday as the downtrend accelerated following Monday’s breakdown which pushed through trend support near 1,860 which is now seen as resistance. Additional resistance is seen near the 10-day moving average at 1,865. Support is seen near the July lows at 1,756. Short-term momentum has turned negative recently as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 8, well below the oversold trigger level of 20, which could foreshadow a correction. Medium-term momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a declining trajectory which points to lower prices.

Home Prices Surged in September

Home-price growth accelerated in September, as families left large cities and look for dwelling in suburbs. The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 7% in the year that ended in September, up from a 5.8% annual rate the prior month. September marked the highest annual growth rate since May 2014. The Case-Shiller 10-city index gained 6.2% over the year ended in September, compared with a 4.9% increase in August. The 20-city index rose 6.6%, after an annual gain of 5.3% in August. Expectations were for the 20-city index to gain 5.6%.

This article was originally posted on FX Empire

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The latest quarterly figures showed $94 million at the top line, down 16% from Q2 and well below the forecast of $133 million, and an EPS loss of 28 cents – far worse than the 3-cent loss predicted. The biggest hit to Beyond Meat came from declines in restaurant business that was only partially redeemed by a 40% surge in grocery sales. The company did announce a partnership with McDonald’s to provide the meat substitute for the fast food giant’s new McPlant menu, but even that announcement was bungled. BYND shares fell sharply when it was rumored that McD’s had developed the meat substitute in-house. 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The stock is selling for $141.91 and its average price target of $110.71 indicates a probable downside of 22% in the coming year. (See BYND stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

  • Elon Musk Surpasses Bill Gates To Become World's Second Richest

    Thanks to Tesla, Inc's (NASDAQ: TSLA) 6.59% surge on Monday, its Chief Executive Officer Elon Musk has become the world's second-richest person, surpassing Microsoft Corporation (NASDAQ: MSFT) co-founder Bill Gates, according to Bloomberg.What Happened: Musk is ranked second with a fortune of $127.9 billion, followed by Bill Gates with $127.7 billion in wealth, in Bloomberg's Billionaires Index.The Tesla CEO, who started the year as the thirty-fifth richest on the list, has added $100 billion in 2020, the largest addition to the net worth of any in the list of world's 500 richest people. More than three-quarters of his wealth is comprised of Tesla shares, which have grown a massive 523.7% year-to-date.Bloomberg also noted that Gates' ranking would have been higher had he not donated more than $27 billion to his foundation since 2006. Amazon.com Inc (NASDAQ: AMZN) chief Jeff Bezos is still the world's richest with a fortune of $182 billion.Why It Matters: Though this year has been good for Tesla's stock, it can get even better in 2021. Tesla stands to gain from its inclusion in the S&P 500 index. On one side, the EV maker has been a target for short sellers, but on the other, it has also received 8 and $1,000 price targets by analysts.Price Action: TSLA shares are trading higher by 2.92% to $537.11 in the pre-market session on the last check Tuesday.Image Courtesy: WikimediaSee more from Benzinga * Click here for options trades from Benzinga * Tesla Rolls Out Firmware Update After Hacker Discovers Model X Security Flaw * Positive Vaccine News, Economic Recovery Lift Global Markets(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • The Dow hitting 30,000 may just be the start, hints investing legend

    Wall Street veteran Byron Wien shares his market outlook on the day the Dow climbed beyond 30,000 for the first time.

  • Biden’s plans will help those ‘fearful of outliving their retirement savings’

    President-elect Joe Biden wants to help Americans save for their golden years by expanding access to retirement savings plans, strengthening Social Security, and making health care more affordable.

  • Tesla, Nikola Rally While Chinese Electric Car Stocks Veer Off

    Tesla and Nikola rose while Chinese electric car stocks gave up gains as the Trump administration finally started the transition process.

  • Yellen Ending Trump Dollar Tumult Promises Cheers in Markets

    (Bloomberg) -- Now that President-elect Joe Biden has picked Janet Yellen as his Treasury secretary, currency markets are growing more confident that the U.S. government’s policy for the dollar will be more clear.Donald Trump’s administration conjured chaos about the greenback, one moment threatening to intervene or otherwise fretting about the currency’s strength, then -- often on the same day -- taking a contradictory stance. From Bill Clinton’s administration through Barack Obama’s, the federal government adhered to the position that a strong currency is a reflection of the strength of the U.S. economy.Prospects that Yellen will returning clarity on dollar policy may help stabilize the $6.6-trillion-a-day currency market that’s the backbone of global finance and commerce. Some traders are hopeful even though the former Federal Reserve chair and her new boss, Biden, are expected to take time to unfold their position on the greenback as they focus initially on fighting the pandemic and its economic damage.“The Yellen appointment may formulate a more coherent policy for the dollar,” Ben Emons, head of global macro strategy at Medley Global Advisors, said in a note. “The reason is that during Yellen’s tenure as chair, Fed policy uncertainty fueled the strength of the dollar. Her experience and knowledge could see a better, formal setting around dollar policy.”The U.S. Treasury secretary has historically been in charge of the dollar, with a unit in the department dedicated to foreign exchange policy.But tradition went by the wayside under Trump. The president and his aides freely discussed the currency, often overstepping Treasury Secretary Steven Mnuchin, and the administration overall showed far less commitment to a strong dollar due to Trump’s obsession with U.S. trade deficits.In July 2019, Trump and his top economic adviser, Larry Kudlow, publicly debated a U.S. intervention to weaken the currency after the European Central Bank signaled looser monetary policy, causing the euro to weaken against the greenback. Within hours of each other, Kudlow said in a television interview that the administration had decided not to intervene, only to have Trump tell reporters that the idea was still under consideration.Former Treasury Secretary Larry Summers says it’s time for the U.S. to return to the strong-dollar policy established during the Clinton administration.“It would be unwise to appear actively devaluationist or indifferent to the dollar,” he said earlier this month in an open letter advising the next Treasury chief.Yellen has in the past noted that a stronger dollar exacerbates the U.S. trade deficit and dampens growth, while a weaker currency does the opposite. She also in 2014 warned her then-Fed colleagues about the risks of commenting on the dollar.“As a former Fed chair, Yellen also fully understands the impact she could have on markets,” Ian Katz, an analyst at Capital Alpha Partners, wrote in a note. “She will choose her words carefully. Investors shouldn’t worry that she will make off-the-cuff remarks that will spur volatility.”Any policy changes under Yellen would coincide with growing consensus on Wall Street that the dollar has entered a period of prolonged weakness. A Bloomberg gauge of the greenback’s value just hit a 2 1/2-year low.“Given that we see the dollar falling through Biden’s term, the issue of dollar policy could be of some significance,” Standard Bank’s head of foreign-exchange strategy, Steven Barrow, said in a note. “More than this, the era of almost non-existent foreign-exchange intervention by developed nations could be about to end as well.”The U.S. last intervened in currency markets in 2011, along with international peers, after the yen soared in the wake of that year’s devastating earthquake in Japan.The dollar has fallen more than 11% since March, as measured by the Bloomberg Dollar Spot Index.Dollar bears have been emboldened by expectations that the Federal Reserve will keep rates near zero for years and that there will be diminished “haven” demand for the dollar given promising results for coronavirus vaccines. That trajectory may continue with Yellen at Treasury, as she’s seen pushing to join Fed Chair Jerome Powell’s policy of lower-for-longer interest rates with extended, expansionary government spending.Not everyone agrees Yellen will make strong pronouncements on dollar policy, since her focus will be on the domestic economy. Nine months into the pandemic, more than 6 million people still claim extended unemployment assistance and joblessness is again on the rise as U.S. coronavirus infections spike.“Yellen is unlikely to forcefully articulate a specific policy on the dollar as she no doubt recognizes that domestic policies are far more important to the U.S. recovery and that trying to control or jawbone the exchange rate’s value should not be a major priority,” said Eswar Prasad, who wrote ‘The Dollar Trap: How the US Dollar Tightened Its Grip on Global Finance.’(Adds analyst comments in 11th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Canada police supervisor relayed 'strong suggestion' to arrest Huawei CFO on plane, court hears

    A Canadian police supervisor who oversaw the arrest of Huawei Chief Financial Officer Meng Wanzhou relayed a "strong suggestion" from her superior to an arresting officer that Meng be apprehended on the aircraft she arrived on, according to court testimony on Tuesday. Huawei lawyers have alleged that during Meng's arrest at Vancouver airport two years ago, U.S. and Canadian authorities coordinated to use CBSA's additional investigative powers to interrogate her without a lawyer present, before Canadian police arrested Meng on a warrant from the U.S. charging her with bank fraud.

  • Best Tech Stocks To Buy Or Watch Now: 5 Growth Stocks Leading The Stock Market

    The best tech stocks to buy and watch are strong price performers with healthy fundamentals, thanks to a new product or service that's driving growth.

  • 6 Cloud Stocks KeyBanc Likes Right Now

    Cloud stocks got a bullish vote of confidence on Tuesday after KeyBanc initiated coverage of a number of software names.The Analyst: KeyBanc analyst Michael Turits initiated coverage of a number of software stocks, including the following six enterprise applications and cloud companies: * Salesforce.com, Inc. (NYSE: CRM), Overweight rating and $310 target. * HubSpot Inc (NYSE: HUBS), Overweight rating and $445 target. * Microsoft Corporation (NASDAQ: MSFT), Overweight rating and $250 target. * ServiceNow Inc (NYSE: NOW), Overweight rating and $620 target. * Oracle Corporation (NYSE: ORCL), Overweight rating and $65 target. * Workday Inc (NASDAQ: WDAY), Overweight rating and $251 target. * Slack Technologies Inc (NYSE: WORK), Sector Weight rating.The Thesis: In a note, Turits said enterprise software stocks have several secular growth drivers, including the digital transformation of the global economy, which has been catalyzed by the pandemic. Another growth driver is the shift of applications to the cloud and the cloud security software associated with that move. Finally, the rise of big data driven by advanced intelligence is a booming segment of the software industry.Related Link: 3 Snowflake Analysts On Cloud Data Stock's Potential: 'Unique Technology Advantage'Despite all the long-term tailwinds in the space, KeyBanc has singled out companies that have proven management teams and strong business models. He's also particularly bullish on companies that operate in segments with high barriers to entry, such as Microsoft in hyperscale cloud and Salesforce in the enterprise-front market.Finally, Turits is most bullish on stocks that have attractive valuations and relatively high growth outlooks. The software group's overall valuations are historically high at the moment, including an average earnings multiple of about 32 and an overall enterprise value-to-revenue ratio of 10.4. Turits said investors should focus on growth stocks that have attractive relative valuations compared to their software peers.Benzinga's Take: There are certainly plenty of attractive growth stories in the cloud software space, but many of these stocks have gone on huge runs in recent years and are already pricing in several more years of outsized growth. The key for investors in the near term will be identifying which stocks have room to run and which ones are already fully valued based on their growth outlooks.See more from Benzinga * Click here for options trades from Benzinga * Airline Stock Short Sellers Deboard Ahead Of Coronavirus Vaccine Approval * Oppenheimer Upgrades General Electric: 'Turnaround Gaining Traction'(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • The Investment Trend That Could Send Tesla To $2 Trillion

    It is absolutely impossible to continue to ignore the electric vehicle revolution, and the auto industry is being forced to innovate or die as a result

  • Is Tesla About to Get Crushed by General Motors?

    One of this year’s themes has been the rise of the EV (electric vehicle) maker, spearheaded by market leader Tesla (TSLA).As the EV pioneer delivered a series of earnings beats and record deliveries, the market has reacted in kind. Heading into the final stretch of 2020, the stock is up by a massive 563%.While Tesla has made meaningful strides forward, its market cap is now at $526 billion, baking in a huge amount of anticipated growth. In comparison, legacy auto giant General Motors’ (GM) market cap stands at $66 billion, almost 8 times less that of Tesla’s. Of course, investors are expecting Tesla’s expansion over the next few years to justify its mighty valuation, but Needham analyst Rajvindra Gill has doubts the company is up to the task, partly due to GM’s increased focus on its own EV segment.Last week, GM's CEO Mary Barra said the company is “going all out with EVs.” GM expects to boast 30 EV models by 2025 (compared to 20 by 2023), and is building new production facilities to accomplish its goals. Furthermore, the company will form a whole new marketing unit focused solely on the EV opportunity.“This additional competition” said Gill, “Could hurt the steep sales ramp that Tesla needs to achieve in order to justify its valuation.”GM’s expected price range for its assault on the EV sector will range between $30,000 (targeting Tesla’s Model 3) all the way up to “more exotic $100K+ options.” Gill argues it looks like a “direct move against all of Tesla's key product lines, from the more-affordable Model 3 to the ‘ludicrous-moded’ Model S.”For Gill, it all points to an uphill struggle for Musk and Co.The 5-star analyst wrote, "Despite Tesla's recent accomplishments, such as its quarterly profits in the past 4 quarters and record deliveries, we are bearish on the stock due to increasing competitive pricing pressure, increasing OpEx to support Gigafactory Shanghai (and later Europe) and Model Y ramps, and the automaker’s history of profitability issues.” Moreover, "we expect the company to experience obstacles and setbacks as it scales manufacturing of the Model Y and Cybertruck. We do not believe the company has sufficient earnings leverage to justify its high multiple,” the analyst added. Accordingly, Gill rates Tesla shares an Underperform (i.e. Sell) without suggesting a price target. (To watch Gill’s track record, click here)What does the rest of the Street think? Looking at the consensus breakdown, opinions from other analysts are more spread out. 10 Buys, 9 Holds and Sells, each, all add up to a Hold consensus rating. The view is conclusively downbeat where the share price is concerned. At $390.13, the average price target suggests shares will decline by 30% over the next 12 months. (See TSLA stock analysis on TipRanks)To find good ideas for automobile stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

  • Mid-Cap Stocks Are Making a Comeback. Here Are 8 That Can Help Anyone Looking for Income.

    High-yielding stocks are making a comeback after trailing the overall market for much of 2020. There could be more upside for the high-yielders and value strategies generally.

  • These Pot Stocks Hit Buy Zones As Biden Transition Lifts Industry Hopes

    Marijuana stocks rallied Tuesday, with both Canadian and U.S. names up in morning trade. Aphria and Curaleaf hit buy zones.