Gold Price Prediction – Prices Whipsaw and Settle Unchanged

Gold prices whipsawed initially surging in the Asian trading session but entering into the US trading session, gold prices were nearly unchanged. While US yields continued to trade under pressure, European yields declined in tandem making it difficult for the dollar to continue to decline. US yields continued to accelerate lower, following weaker than expected US jobs data.

Technical Analysis

Gold prices attempted to break out but traders were unsuccessful pushing gold prices above resistance near the June highs at 1,439. Prices formed a doji day were the open and close were at the same level reflecting indecision. Support is seen near the 10-day moving average at 1,408. Additional support is seen near the July lows at 1,399. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 70, which is in the upper end of the neutral range. Prices are slightly overbought according to the relative strength index (RSI). The current reading is just above 70, which is the overbought trigger level and could foreshadow a correction. Medium term momentum is neutral as the MACD (moving average convergence divergence) histogram is printing near the zero index level with a flat trajectory which reflects consolidation.

Private Payrolls Rise Less than Expected

Private job creation came in less than expected in June, as companies adding just 102,000 new positions, according to ADP. Expectations were for private payrolls to increase by 135,000. This comes following May job growth of 41,000. This comes ahead of Friday’s government jobs report which is expected to show growth of 165,000 after May’s lackluster 75,000.

Small businesses continue to face an uphill battle. Companies with fewer than 50,000 employees saw another setback in June, with payrolls falling by 23,000 after a decline of 52,000 the previous month. Businesses with fewer than 20 employees were particularly hard-hit, subtracting 37,000 jobs. Companies with 50 to 499 employees posted growth of 60,000, while large businesses added 65,000.