Gold Prices Rise Slightly As Yields Surge

Gold prices edged higher, moving sideways. U.S. yields moved higher following a larger than expected job report. The dollar edged higher as yields popped, which capped upward movements in the yellow metal. Wages also climbed in the U.S., hitting the highest levels in more than a decade.

Technical Analysis

Gold prices rallied, whipsawed, and traded sideways. Prices remain above support near the 50-day moving average at 1,802. Resistance is seen near the 10-day moving average at 1,811. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is negative as the MACD (moving average convergence divergence) index has generated a crossover sell signal. This situation 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). The MACD histogram prints in negative territory with a downward sloping trajectory pointing to lower prices.

Payrolls Rise More than Expected

Nonfarm payrolls rose more than expected in January, despite the spread of the omicron variant. The news follows a worse than expected ADP private payroll report, which showed declines in new jobs reported earlier in the week. According to the U.S. Labor Department, Nonfarm payrolls surged by 467,000 for the month, while the unemployment rate edged higher to 4%. Expectations were for payrolls to rise by 150,000 and a 3.9% unemployment rate. Wages also rose sharply, accelerating 0.7%, in January and up 5.7% year over year.