Gold Price Prediction – Prices Rally on Weak Claims Data but Fall Short of Resistance

Gold prices moved higher on Thursday attempting to push above resistance. Softer than expected jobless claims took some of the luster out of the greenback, paving the way for higher gold prices. This comes on the heels of Wednesday speech by Fed chair Powell who relayed to the markets that the future path of interest rates was data dependent and there was no fixed path.

Technical Analysis

Gold prices moved higher on but where unable to push through resistance near a downward sloping trend line that comes in near 1,224. The first level of support is seen near the 20-day moving average at 1,219. Additional support is seen near the 50-day moving average at 1,214. Momentum continues to flip flop but short-term momentum generated a crossover buy signal. The fast stochastic as well as the MACD generated crossover buy signals which points to positive momentum. The relative strength index (RSI) is printing in the middle of the neutral range at 54 which reflects consolidation.

Jobless Claims Rose to Highest level in 6-months

Initial jobless claims increased by 10K to a seasonally adjusted 234k for the week ended November 24, the highest level since the mid-May, according to the Labor Department. Claims have now risen for three straight weeks. Expectations were for claims to fall to 220K.

The claims data included Thanksgiving Day on Thursday. Claims tend to be volatile around holidays. The Labor Department said no states were estimated last week. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 4,750 to 223,250 last week. The claims report also showed the number of people receiving benefits after an initial week of aid increased 50,000 to 1.71 million for the week ended November 17. The four-week moving average of the so-called continuing claims rose 19,750 to 1.68 million.