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David Becker

Gold prices edge higher whipsawing on Friday as the dollar index finally eased. The dollar continued to gain traction with continuous gains against the Euro which hit a 35-month low of 1.0655. Since gold prices are quoted in US dollars the strong gain in the greenback weighed on the yellow metal. US yields moved lower across the curve following news that jobless claims were surging. The Trump administration sent out an email to state governments asking them not to release data about jobless claims until the news was released weekly by the US government. This comes as California said that its normal daily claims request jumped from 2K to 80K in the latter part of this week. This weighed on US yields.

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Gold prices whipsawed on Friday making a higher high and a lower low but were not able to recapture resistance. Prices closed below the 200-day for the third consecutive trading session above support near the weekly lows at 1,451.  Resistance is now seen near the 10-day moving average at 1,555.

Short term momentum has whipsawed and turned negative generating a crossover sell signal after turning positive. The current reading on the fast stochastic is 11 below the oversold trigger level of 20 which could foreshadow a correction.

Medium-term momentum is negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram sliced through the zero-index line which reflects accelerating negative momentum. The MACD accelerated to the lowest level seen since September of 2011.

 

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