Gold Price Prediction – Prices Consolidate Ahead of NFP

The gold prices consolidated on Thursday ahead of Friday’s employment report. Expectations are for a 765,000 increase in non-farm payrolls. The dollar moved lower, which failed to buoy the yellow metal. U.S. Treasury yields were mixed as the 2-year increased slightly and the 10-year moved lower. Jobless claims fell last week to their lowest levels since March 2020. This situation followed Wednesday ADP private payrolls which came in softer than expected.

Tecnical analysis

Gold prices edged lower and continue to trade in a tight range. Resistance is seen near the August highs at  1,831. Support is seen near the 10-day moving average of 1,800. The 10-day moving average crossed above the 50-day moving average which means that a short-term uptrend is now in place. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are overbought as the fast stochastic is printing a reading of 84, above the overbought trigger level of 82, which could foreshadow a correction.   Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This buy signal 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).

Jobless Claims Fall

The Labor Department reported that jobless claims fell last week to their lowest levels since March 2020  First-time jobless claims totaled 340,000 for the week ended August 28, compared with the 345,000 estimates. That is the lowest level for initial claims since March 14, 2020, when first-time claims totaled 256,000, just before the coronavirus pandemic caused a historic rush to unemployment benefits.