Gold Price Prediction – Prices Drop on Strong Jobs Gains
Gold prices dropped sharply on Friday following a larger than expected gain in US jobs. US yields surged higher with the 10-year yield rising nearly 9-basis points on Friday up 25-basis points for the week. The dollar rebounded on Friday after declining most of the week, which put additional pressure on the price of the yellow metal.
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Gold prices dropped sharply and closed down nearly 3% for the week. Prices sliced through support which is seen near the 50-day moving average at 1,697 which is now seen as resistance. Target support is seen near the 100-day moving average at $1,642. Short term momentum remains negative as the fast stochastic continues to accelerate lower. The current reading on the fast stochastic is 19, just below the oversold trigger level of 20 which could foreshadow a correction. Medium term momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices.
US Jobs Numbers Surge
U.S. jobs number rose by 2.5 million in May and the jobless rate declined to 13.3%, according to he Labor Department. Consensus estimates had expected the unemployment rate to rise to 19.5% from April’s 14.7% and payrolls to drop by 8.33 million. The majority of the industry’s May gains were in foodservice, which suffered the worst of the nation’s layoffs in prior months. Employers added back some 1.37 million chefs, waiters, cashiers and other restaurant staff in May.