Gold Price Prediction – Prices Edge Higher Following Weak Payroll Report

Gold prices edged higher but settled well off the highs of the trading session. The dollar declined and yields moved higher. The two-year yield continues to trend upward despite a softer than expected non-farm payroll report released in the U.S. on Friday. Nonfarm payrolls rose by just 194,000 in the month, compared to expectations of 500,000. The unemployment rate fell to 4.8%, better than the expectation for 5.1% and the lowest since February 2020.

Technical analysis

Gold prices edged higher as the dollar eased. Resistance is seen near the 50-day moving average at 1,779. Support is seen near the 10-year moving average at 1,753. Short-term momentum is positive as the fast stochastic recently generated a crossover buy signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

U.S. Payrolls Fall More than Expected

Nonfarm payrolls rose by 194,000 in September compared to expectations of 500,000, the Labor Department reported Friday. The unemployment rate fell to 4.8%, better than the expectation for 5.1% and the lowest since February 2020. The headline number was hurt by a 123,000 decline in government payrolls, while private payrolls increased by 317,000. Average hourly earnings a sign of inflation increased by 0,6% onth over month compared to expectations that it would rise by 0.4% month over month.