Gold Price Prediction – Gold Consolidates Forming Bull Flag Pattern
Gold prices attempted to move higher on Tuesday but were unable to pierce through resistance levels. Prices were unable to make a new high for October and continues to form a bull flag pattern. Stronger than expected Jobs Openings along with a robust Industrial production, buoyed the dollar, while yields remained flat. It appears that wage growth is lagging the lack of labor.
Gold prices were unable to make a fresh higher and continue to generate a bull flag pattern which is a pause that refreshes higher. Resistance is seen near the October highs at 1,233. Support is seen near the 20-day moving average at 1,201. The trend is positive as the 20-day moving average crossed above the 50-day moving average, which means a medium term uptrend is now in place. The MACD histogram is accelerating higher which shows that momentum is on its way higher. The fast stochastic surged into overbought territory printing a reading of 84, above the oversold trigger level of 80, which could foreshadow a correction.
Jobs Data Was Strong but Wages Have Yet to Climb
The JOLTS reported showed that job openings hit a record in August, indicating companies could face more inflationary pressures as wages climb. The vacancies level hit 7.14 million for the month, according to the Federal Reserve. The total number of hires also reached a record of 5.78 million.
Openings trumped total level of workers looking for jobs, which stood at 6.23 million for that month and fell to 5.96 million in September. The JOLTS is closely as in indicator of when worker wages might start catching up with the acceleration in employment and the rapid decline in unemployment.
The quits rate, which reflects confidence that people can easily find other jobs edged just a shade lower from July to 3.58 million. The rate, which counts those who voluntarily left positions, jumped 12.7% from August 2017.