Gold Price Prediction – Prices Drop on Strong Dollar Gains

Gold prices dropped sharply on Thursday following a stronger than expected ADP private payroll report ahead of Friday’s employment report from the Department of Labor. The dollar rallied putting downward pressure on the yellow metal. U.S. yields rose helping to buoy the greenback, which paved the way for lower gold prices.

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Technical analysis

Gold prices dropped sharply. The uptrend is still in place as the 10-day moving average recently crossed above the 200-day moving average.Target resistance is seen near the 10-day moving average at 1,894. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The RSI tumbled moving from overbought printing a reading of 75, down to 59, which reflects accelerating negative momentum. Medium-term momentum has turned negative MACD (moving average convergence divergence) as the MACD (moving average convergence divergence) index generate a crossover sell signal.

Private job growth for May surged as companies hired 970,000 workers, according payroll processing firm ADP. It was a big jump from April’s 654,000 and the largest gain since the 4.35 million added in June 2020. The April total was revised sharply lower from the initially reported 742,000.