Technical Analysis Gold for 8/12/15

Gold prices move higher for a third consecutive trading session, bouncing off support as U.S. yields moved lower. The break out in bonds, following the devaluation of the Chinese Yuan allowed the yellow metal some room to move higher.  Prices were buoyed by solid Q2 nonfarm productivity which grew 1.3% from -3.1% in Q1.The recent high was 7.9% in 2Q09 and the low was -3.5% in 1Q14.Unit labor costs were up 0.5% from 6.7% in Q1.

Gold prices are now poised to test former support now resistance at $1,150. Support is seen near the 10-day moving average near $1,093.  Momentum has turned positive with the MACD (moving average convergence divergence) index generating a buy signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread.  The index moved from negative to positive territory confirming the buy signal.