Gold Price Prediction – Gold Trades Sideways as Declining Claims Offset Dropping Import Prices

Gold prices edged lower on Thursday as import prices moved lower and jobless claims tumbled. The dollar was also mixed making it difficult to get a gauge on gold prices. As trade discussing with China continuing to improve the risk off trade which helped buoy gold prices is abating.

Technical Analysis

Gold prices moved sideways on Thursday trading near the October highs which was former resistance now support near 1,243.  Resistance is seen near the December highs at 1,250.  Short term momentum has turned negative as the fast stochastic generated a crossover sell signal in oversold territory. The current reading on the fast stochastic is 81, still above the overbought trigger level of 80 which could foreshadow a correction. The MACD (moving average convergence divergence) histogram is printing in the black with a declining trajectory which points to decelerating positive momentum.

Import Prices Dropped to 3-year Lows

Import prices tumbled 1.6% in November according to the Labor Department. The decline was the largest seen in more than 3-years. October’s import price figure remained unchanged at 0.5%. Expectations were for import prices to decline by 0.9% in November.

Jobless Claims Declined More than Expected

The health of the jobs market continues to remain strong. The labor Department reported that initial claims dropped 27,000 to 206,000 for the week ended December 8, Last week’s decline in claims was the largest since April 2015. Claims hit 202,000 in mid-September, which was the lowest level since December 1969. Data for the prior week was revised to show 2,000 more applications received than previously reported. Expectations where for claims to decline to 225,000 in the latest week. Claims shot up to an eight-month high of 235,000 during the week ended November 24. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 3,750 to 224,750 last week.