Gold Price Prediction – Prices Drop on Strong ADP Payroll ReportUS ISM manufacturing rises more than exected
Gold prices tumbled on Wednesday as traders took profits after fresh highs. This came despite a decline in the dollar and a rise in US yields. The Fed in its meeting minutes discussed how difficult the current market environment will be for the US economy.The ADP private payrolls came in stronger than expected which helped buoy US yields. The US ISM manufacturing report also moved into expansion territory which also helped buoy yields generating headwinds for gold prices,.
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Gold prices tumbled on Wednesday following Tuesday’s fresh 8-year highs. Prices tested support near the 10-day moving average at 1,760 and rebounded. Additional support is seen near the 50-day moving average at 1,726. Resistance is seen near the August 2012 highs at 1,791. Short term momentum has reversed and turned negative after turning positive as the fast stochastic whipsawed and generated a sell signal in overbought territory. The current reading on the fast stochastic is 87, above the overbought trigger level of 80 which could foreshadow a correction. Medium-term momentum remains positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.
ADP reported on Wednesday that US Private payrolls grew by 2.369 million for the month, a bit lower than the 2.5 million. This comes following an upward revision to the prior month which was one of the largest revisions on record according to ADP. The total for June declined from the previous month, following an upward revision to 3.065 million. ADP initially said May saw a loss of 2.76 million, which was a revision of nearly 6-million jobs.