Gold Prices Slip as Treasury Yields Rally

Key Insights

• Gold prices moved lower.
• The dollar rallied on more robust yields.
• Jobless claims declined.

Gold prices moved lower on Thursday as the dollar gained traction. Treasury yields continued to rally following a strong Jobless claims report. The yield differential moved in favor of the Euro and Yen, putting downward pressure on the greenback. For April, the Philly Fed came in a softer than expected at 17.6 versus expectations around the trailing year-to-date average 21.

Initial Jobless Claims for the week ending April 16 totaled 184,000, a decline of 2,000 from the previous week but just ahead of estimates for 182,000. Continuing claims, which run a week behind the headline number, fell by 58,000 to 1.417 million, the lowest level since February 21, 1970.

Technical Analysis

Gold prices eased on Thursday. Prices could not push through resistance near the 10-day moving average at 1,958. Support is seen near the 50-day moving average at 1,933.

Short-term momentum has turned negative as the Fast Stochastic generated a crossover sell signal. Both the RSI and the Fast Stochastic are in the middle of the neutral range, reflecting consolidation in the price of gold.

Medium-term momentum has turned negative as the MACD generates a crossover sell signal. This occurs as the MACD line crosses below the MACD signal line. The  MACD (moving average convergence divergence) histogram has a negative trajectory that points to lower prices and accelerates negative momentum.