Gold Price Prediction – Prices Rebound Despite a Strong Dollar as Yields Ease

Gold prices rose on Friday as yields whipsawed and eventually fell. The dollar rose pushing through the February highs. The U.S. Treasury yields surged following a larger than expected employment report. February’s surprisingly strong job growth signals that the economy could be at a pivot point and is about to enter a hiring boom.

Trade gold with FXTM

Technical analysis

Gold prices edged higher as yields eventually fell. Resistance is seen near the 10-day moving average at 1,749. Target support is seen near the June lows at 1,670.   Prices are oversold as the relative strength index (RSI) is printing a reading of 27, below the oversold trigger level of 30. The fast stochastic is printing a reading of 6, below the oversold trigger level of 20 which could foreshadow a correction.  Medium-term momentum has negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

Jobs Data was Stronger than Expected

The Labor Department reported Friday that nonfarm payrolls jumped by 379,000 in February and the unemployment rate fell to 6.2%. That compared with expectations of 210,000 new jobs and the unemployment rate holding steady from the 6.3% rate in January. Nearly all the job gains came from the leisure and hospitality sector, which saw an increase of 355,000 amid a relaxation of dining restrictions in some areas.