Gold Price Prediction – Gold Prices Rally and are Poised to Break Out

An inline jobless claims report, issued early in the US trading session, took some of the fear out of the market and allowed gold prices to rise. Gold has been recently trading in lockstep with US stocks which is unusual. The dollar was nearly unchanged on Thursday and US yields moved sideways. Crude prices surged more than 20% and are up nearly 50% for the week. This follows the massive selloff in the May crude oil contract which dove below zero.

Technical analysis

Gold prices surged higher rising 0.8% and closing at a 7-year high. The next level of target resistance is the April high at $1,747. After that level, gold could rally to $1,921. A break of this 2011 level would lift gold into blue sky territory. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal in the middle of the neutral range. The RSI moved higher in tandem with price action reflecting accelerating positive momentum. The MACD (moving average convergence divergence) index stabilized and started to accelerate higher which reflects accelerating medium-term momentum.

US Jobless Claims Rise in Line with Expectations

US Jobless claim continued to climb at an unprecedented rate last week with 4.4 million new individuals filing initial unemployment insurance claims, bringing the total of the past five weeks to 26.4 million according to the Labor Department. The number represented a decline of 810,000 from the previous week. Expectations were for jobless claims to rise by 4.3 million.