Gold Price Prediction – Prices Drop Sharply as Yields Continue to Rise
Gold prices tumbled on Friday as the dollar rebounded sharply and US yields surged. The strong upward momentum in US yields is putting downward pressure on gold prices. This came despite weaker than expected US payroll data. With a new administration come in in 2-weeks, the market is getting ahead of a potential stimulus deal. President-elect Biden condemned President Trump’s comments and said that Vice President Trump is welcome to come to the inauguration.
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Gold prices sliding thro9ugh support. Resistance, which is former support is seen near the 10-day moving average near 1,899. Support is seen near an upward sloping trend line that comes in near 1,815. The 10-day moving average crossed above the 50-day moving average, which means a medium-term uptrend is now in place. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 73, down from 88 which reflects decelerating positive momentum. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) line generated a crossover sell signal.
Jobs Data Disappointed
The Labor Department reported that nonfarm payrolls fell by 140,000. That was below expectations for 50,000 increase. It was the first monthly drop since April. The unemployment rate was unchanged at 6.7%, compared to a 6.8% estimate. An alternative unemployment measure that includes discouraged workers and those holding part-time jobs for economic reasons declined to 11.7% from 12%.