Gold Price Prediction – Prices Continue to Rally Following Weak Payroll Data

Gold prices continued to move higher on Friday, following a weaker than expected US jobs report which saw US yields tumble. The softer than expected jobs data, put downward pressure on US yields, allowing the EUR/USD to rally, which paved the way for higher gold prices. The US 10-year yield hit a fresh 2-year low of 2.05%, and settled near 2.08%.

Technical Analysis

Gold prices pushed to a fresh 13-month high at 1,349 following soft jobs data. Prices close near 1,340 which equals a fresh high close for 2019. Support is seen near the 10-day moving average at 1,309. Resistance is seen near the April 2018 highs at 1,365. The 10-day moving average recently crosses above the 50-day moving average which means that a short-term downtrend is now in place. Prices are overbought. The relative strength index (RSI) which is a momentum oscillator is printing a reading of 77, above the overbought trigger level of 70 which could foreshadow a correction. The fast stochastic generated a crossover sell signal in oversold territory, which also reflects accelerating negative momentum. The current reading on the fast stochastic is 86, above the overbought trigger level of 80, which could foreshadow a correction. Medium term momentum is positive as the MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory which points to higher prices.

Non-Farm Payrolls Came in Weaker than Expected

The US economy added 75,000 jobs in May, compared to the expectation that it would increase by 175,000 making it one of the weakest monthly gains since the recession ended, according to the Labor Department. The unemployment rate held steady at 3.6%, a half-century low. The labor-force participation rate, or the share of Americans holding or seeking a job, clocked in at 62.8% in May, unchanged from the previous month.

In May, private-sector workers saw average hourly earnings rise 3.1% from a year earlier, or 0.2% month over month. By comparison, in May 2018, wages climbed 2.9% annually. The broadest measure of unemployment, the U6 fell to 7.1% in May from 7.3% the prior month. T