Gold Price Prediction – Prices Slip Despite a Slide in the Dollar

Gold prices edged lower and are trading in a very tight range but cannot pierce through resistance.  The dollar moved lower as yields pulled back. Unemployment claims continue to decline, but the total number of employee assistance programs surged in October. Special pandemic-related emergency programs ended in most places in September, but the total for the Pandemic Unemployment Assistance program, in particular, soared in the last week of October, rising by more than half a million.

Technical analysis

Gold prices moved lower and consolidated but were unable to break through trend line resistance near a downward sloping trend line that comes in near 1,866. Target resistance is seen near the June highs at 1916. The tone is definitely sideways.

Support is seen near the 10-day moving average at 1,849. The 10-day moving average has crossed above the 50-day moving average, which means a short-term uptrend is now in place. Prices are overbought as the fast stochastic is printing a reading of 85, well above the overbought trigger level of 80. 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.

Jobless Claims Declined

Jobless claims totaled 268,000, a decline of 1,000 from a week ago and slightly higher than expected at 260,000. The total was the lowest since the beginning of the pandemic. The four-week moving average, which smooths out weekly volatility, declined to 272,750, just a bit above the total for the most recent weekly count. Continuing claims, which run a week behind the headline number, declined by 129,000 to 2.08 million, a pandemic-era low dating back to March 14, 2020.