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.
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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.
