Gold Price Prediction – Prices Slip on Dollar Strength

Gold prices whipsawed and eventually settled lower after attempting to move higher and lower throughout the trading session. Gains in the greenback continue to weigh on the yellow metal. This came despite a softening of U.S. long-term yields.  Gross domestic product was more substantial than anticipated in the fourth quarter. The third and final reading on GDP showed a gain of 4.3%, up from previous estimates and the Wall Street consensus of 4.1%.

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Technical analysis

Gold prices moved lower but continue to trade in a tight range. Prices nearly formed a doji day. Prices were unable to recapture resistance near the 10-day moving average at 1,734. Target resistance is now seen near the 50-day moving average at 1,785. Additional support is seen near the June lows at 1,670.   Short-term momentum has flipped and is now negative as the fast stochastic generated a crossover sell signal, just above the oversold trigger level, and has now moved lower.  The current reading on the fast stochastic is 76, just below the overbought trigger level of 80, foreshadowing a correction. Medium-term momentum has turned positive. The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Jobless Claims Fall More than Expected

Initial jobless claims unexpectedly fell sharply last week amid signs that hiring has picked up in the U.S. economy. Claims totaled 684,000 for the week ended March 20, the first time the number has been below 700,000 during the Covid-19 era. The level was a substantial decline from the 781,000 from a week earlier and was the lowest since March 14, 2020. Expectations were for claims to total 735,000. In addition to the drop in weekly claims, continuing claims, declined to 3.87 million, a slide of 264,000.