Gold Price Prediction – Prices Form Outside Day Following Rise in Jobless Claims

Gold prices moved lower, forming an outside day, treasury yields rallied, and the dollar rose. The upward move in Treasury yields came despite a larger than expected increase in US initial jobless claims. The upward move in Treasury yields has helped cap the upward movement in gold prices and lift the US dollar. Since gold is priced in the US currency, a strong dollar generally weighs on gold prices.

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Technical analysis

Gold prices moved lower following the Labor Departments’ claims report. Prices remain above support near the 10-day moving average at 1,719. Target resistance is now seen near the 50-day moving average at 1,797. Additional support is seen near the June lows at 1,670.   Short-term momentum is positive as the fast stochastic continues to climb following 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 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.

Jobless Claims Rise More than Expected

First-time claims for jobless benefits showed an unexpected jump to 770,000 according to the Labor Department. Expectations were for initial jobless claims to a total of 700,000 for the week ended March 13. The total represented an increase from the previous week’s upwardly revised 725,000. Continuing jobless claims, which run a week behind the headline number, were little changed at 4.12 million.