Gold Price Prediction – Prices Move Higher on Weak Employment Report
This came despite a much larger than expected decline in US non-farm payrolls. Despite the huge gain in payrolls and the large up move in the unemployment rate, the number completely understand the current situation.
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Gold prices edging through resistance near a downward sloping trend line which might be considered a breakout. Support which was former resistance near the 50-day moving average at 1,593. Target resistance on the yellow metal is seen near the March highs at 1,700.
A short-term trend is now positive. The 10-day moving average has crossed above the 50-day moving average which means that a short-term trend is now in place. Short term momentum has turned positive after just turning negative. fast stochastic generated a crossover buy signal. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram also generated a crossover buy signal, but the trajectory is now flattening which reflects consolidation.
Employment Numbers are Dreadful
The US Labor Department reported on Friday that US non-farm payrolls decreased by 701,000 jobs in March. Job losses were widespread. The payrolls decline was the largest monthly decline since March 2009, the worst month for job losses during the last recession. The unemployment rate for March rose to 4.4% from 3.5% in February, the largest one-month increase in the rate since January 1975. In March, more than half of the jobs lost, 417,000, were at restaurants and bars. Hotels and other tourism and hospitality businesses industries also hit early in the crisis cut 42,000 jobs.