Gold Price Prediction – Prices Form Doji Day Following Payrolls

Gold prices were nearly unchanged on Friday, forming a doji day. The dollar was lower in the wake of the softer than expected U.S. nonfarm payroll report. U.S. Treasury yields moved higher across the curve with the 10-year yield hitting the highest level in 21-months. Despite the softer payroll report, the unemployment rate dropped to a pandemic level low, while average hourly earnings rose more than expected.

Technical Analysis

Gold prices formed a doji day on Friday where the open and close were at the same level. Resistance is seen near the 200-day moving average at 1,800.  Support on the yellow metal is seen near the December lows at 1,753. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is negative as the MACD (moving average convergence divergence) index is generated a crossover sell signal. The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

Payrolls Rise Less than Expected

The U.S. Labor Department reported that Nonfarm payrolls grew by 199,000, while the unemployment rate fell to 3.9. Compared with expectations, payrolls would rise by 422,000, and the unemployment rate would drop to 4.1%. The unemployment rate was a fresh pandemic-era low and near the 50-year low of 3.5% in February 2020. That decline came even though the labor force participation rate was unchanged at 61.9% amid an ongoing labor shortage in the U.S.