Gold Price Prediction – Prices Remain Range Bound as the Dollar Continue to Rally

Gold prices moved sideways edging lower on Thursday as the dollar gain traction against most major currencies. A stronger than expected durable goods orders and a slight up tick in jobless claims buoyed the greenback but took some of the luster out of US yields. The risk off trade abated allowing stock prices to rise as volatility retreated paving the way for lower gold prices.

Technical Analysis

Gold prices moved lower on Thursday after testing the October highs at 1,239. Support on the yellow metal is seen near the 20-day moving average at 1,211. The 20-day moving average recently crosses above the 50-day moving average which shows that a medium term up trend is in place. Positive momentum is decelerating as the MACD (moving average convergence divergence) histogram prints in the black with a declining trajectory which points to consolidation.

Durable Goods Order Remain Buoyed

US Durable Good order increased slightly according to a report from the US Commerce Department Order increased by 0.8% September, a sharp slowdown from a 4.6% jump in August. The swing was heavily influenced by the volatile aircraft category, which fell 17.5% in September after having surged 63.7% August. Business investment dipped 0.1% in September following a 0.2% fall in August. The recent weakness in investment orders has raised concerns about whether a growing trade war with China and stock market volatility were making businesses more cautious.

Jobless Claims Edged Higher

The Labor Department reported that jobless claims increased 5,000 to 215,000 for the week ended October 20. Data for the prior week was unrevised. Claims fell to 202,000 during the week ended September 15, which was the lowest level since November 1969. Expectations were for claims to rise to 214,000 last week. The Labor Department said claims for South and North Carolina continued to be affected by Hurricane Florence. Claims for Florida and Georgia were impacted by Hurricane Michael. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, was unchanged at 211,750 last week.