Gold Consolidates Wednesday’s Gains

Gold prices edged higher on Thursday. U.S. Treasury yields moved lower, weighing on the greenback, which paved the way for higher gold prices. A larger than expected rise in U.S. jobless claims helped take some of the upward pressure on U.S. Treasury yields. The increase in jobless claims was somewhat offset by the Philly Fed survey, which came in stronger than expected.

Technical Analysis

Gold prices moved higher on Thursday, consolidating some of Wednesday’s gains. Support is seen near the 10-day moving average at 1,1820   Resistance is seen near the November highs at 1,877. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought as the fast stochastic is printing a reading of 91, above the overbought trigger level of 80. Medium-term momentum is positive as the MACD (moving average convergence divergence) index has generated a crossover buy signal. This situation occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory pointing to higher prices.

Jobless Claims Rise More than Expected

According to the Labor Department, weekly initial jobless claims for the week that ended on January 15th jumped to 286,000. The reading was the highest that it has been since October. The four-week average was 231,000, up 20,000 from the week before’s average. The surge in jobless claims was attributed to the resurgence of the Omicron variant.