Gold Prices Move Higher as Yields Consolidate

Key Insights

• Rebounded for the Second Consecutive Trading Session
• The Dollar whipsawed and was Nearly Unchanged
• U.S. Treasury yields moved lower despite a robust jobless claims report

Gold prices moved higher on Thursday. The move follows Thursday’s Fed announcement that they were raising borrowing rates by 25-basis points. Rates are pricing in 6-more hikes in 2022 which would be one every meeting while COVID still remains.

Jobless claims totaled 214,000 for the week ended March 12, better than the expected down 6,000 from the average estimate of 220,000 and a decline of 15,000 from the prior week. The total was the lowest since January 1. The four-week moving average, also dropped, falling 8,750 to 223,000. Continuing claims, which run a week behind the headline numbers, fell by 71,000 to 1.42 million, the lowest level since Feb. 21, 1970.

Technical Analysis

Gold prices rallied. Resistance is seen near the 10-day moving average at $1,983. Additional resistance is seen near the March highs at $2,070. Support is seen near the 50-day moving average at 1,873. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal.

The medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).