Gold Price Prediction – Gold Whipsaws but Remain in Uptrend

Gold prices whipsawed for a second consecutive trading session, rebounding from session lows. The price action in the yellow metal shows that market participants are indecisive about the future direction of gold prices. The dollar index rallied, which weighed on the price of gold. Yields were slightly lower. Both the 2-year yield and the 10-year yield moved lower. The decline in yields comes despite a robust jobless claims report which showed that continuing claims had recovered back to the pre-pandemic average for February 2019.

Technical Analysis

Gold prices whipsawed for a second consecutive trading session. Support is seen near the 50-day moving average at $1,801. Resistance is seen near a downward sloping trend line at $1,857.  The 10-day moving average has crossed above the 50-day moving average which means that a short-term up trend is now in place. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices. The 10-day moving average is poised to cross above the 50-day moving average, which means a short-term uptrend could now be in place.

Jobless Claims Remain at 50-year Lows

Jobless claims declined last week and remained close to their lowest level in more than 50 years. Jobless claims for the week ended December 25 totaled 198,000, less than the 205,000 expected and a reduction of 8,000 from the previous period. When adjusting for weekly volatility, the four-week moving average for claims came to 199,250, the lowest level since October 25, 1969.