Gold Price Prediction – Prices Slip on Dollar Strength

Gold prices edged lower as the dollar moved higher, following a stronger than expected U.S. jobless claims report. Since gold is priced in U.S. dollars, a stronger greenback generally weighs on the value of the yellow metal. U.S. yields were strong, with both the 2-year yield and the 10-year yield rising. U.S. Leading Indicators were softer than expected, but this is generally not a market-moving event.

Technical analysis

Gold prices edged lower, holding just above support near the 50-day moving average at 1,779. Additional support is seen near the September lows at 1,721. Resistance is seen near a downward sloping trend line that comes in near 1,791. The 10-day moving average is poised to cross above the 50-day moving average which means a short-term uptrend is about to be in place. Short-term momentum turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher gold prices.

Jobless Claims Continue to Fall

According to the Labor Department, jobless claims unemployment insurance totaled 290,000 for the week ended October 16, down 6,000 from the previous period. This was the second week in a row that claims ran below 300,000. Expectations were for a small increase to 300,000. Continuing claims also fell to their lowest level since the Covid-19 crisis began, dropping to 2.48 million, a decline of 122,000 from the previous week.