Gold Price Prediction – Prices Remain Near 6-Year Highs Following US Jobs Report

Gold prices whipsawed near 6-year highs following the US jobs came out in line with expectations. Downward revisions to both May and June weighed on US yields pushing the 10-year benchmark treasury down to 1.84%. This is the lowest level seen in the 10-year yield since September of 2016. While the labor force remains solid and the number of people looking for jobs has increased, there are chinks in the armor of the US economy.

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Technical Analysis

Gold prices moved whipsawed near the current 6-year highs. Prices remained above  the 10-day moving average, which is now seen as support near the 10-day moving average near 1,425. Target support on the yellow metal is seen near the 50-day moving average at 1,381. Resistance is seen near the July highs at 1,453. Short term momentum turned positive as the fast stochastic generated a crossover buy signal. Medium term momentum is neutral but is during positive as the MACD (moving average convergence divergence) histogram is printing in the red with a rising  trajectory which points to consolidation.

Jobs Data was Slightly Disappointing

The economy added 164,000 nonfarm payrolls in July, in line with expectations but revisions reduced job growth in May and June by 41,000. That took the three-month average to 140,000 job gains, well off the 200,000-plus levels of last autumn. Wages rose 0.3% in July, or 3.2% year over year, and June wage growth was revised higher to the same level. May’s total nonfarm payrolls were revised down to 62,000 and June job creation was trimmed by 31,000 to 193,000. Health-care hiring in July rose 30,000 while professional and technical services added 31,000. Computer systems design and related services rose by 11,000 jobs and was responsible for about a third of employment gains in professional and technical services in July and during the year.