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David Becker
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Gold prices edged lower on Wednesday as the dollar crept higher. U.S. Treasury yields moved lower following a slightly softer than expected ADP private payroll report. U.S. ISM services were also slightly weaker than expected but remained very robust. Prices are moving sideways and the upward trend rebounded that started in April is beginning to show that it is tired.

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Technical analysis

Gold prices moved higher on Wednesday but remained rangebound. Target resistance is seen near the April highs at 1,797 and then the Fibonacci retracement level of 38.2%, which is seen near 1,828. Support is seen near the 10-day moving average at 1,780 and then the 50-day moving average at 1,745. The 10-day moving average has crossed above the 50-day moving average which means that a short-term uptrend is now in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is poised to turn negative as the MACD (moving average convergence divergence) index is above to generate a crossover sell signal. The MACD histogram is printing in positive territory but also poised to generate a crossover sell signal.

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Private Payrolls Rise

Private job growth accelerated in April. ADP reported that U.S. companies added 742,000 workers for April, slightly less than the  800,000 forecasts. Leisure and hospitality led growth with 237,000 new positions. Trade, transportation and utilities also was a major contributor, adding 155,000 new jobs. Services typically account for the bulk of job growth, and that was true again in April as the sector added 636,000 positions. Companies with 500 or more employees led with 277,000, followed by small businesses with fewer than 50 employees at 235,000 and medium-sized firms with 230,000.

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