Gold Price Prediction – Prices Rise Despite Robust Jobs Data

Gold prices rallied sharply, breaking through trend line resistance despite a stronger than expected jobs report from the Department of Energy.  On Thursday, the Fed said they will be patient and keep a sharp eye on the job market. They also believe that inflation will remain elevated for an extended period but will be transitory. This put downward pressure on yields, which weighted on the greenback and provided the impetus for higher gold prices.

Technical analysis

Gold prices rose sharply breaking through trend line resistance which is now short-term support. Additional support is seen near the 50-day moving average at 1779. Resistance is seen near the September highs 1,834. Short-term momentum is positive as the fast stochastic generates a crossover buy signal. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Jobs Data Outperform

According to the Labor Department, Nonfarm payrolls increased by 531,000 for October, compared with estimates that the number of jobs would rise to 450,000. The unemployment rate fell to 4.6% and had been expected to edge down to 4.7%. The unemployment rate drop came with the labor force participation rate holding steady at 61.6%