Gold Price Prediction – Gold Rallies on Dollar Weakness
Gold prices continued to rally on Thursday as the dollar continued to head south. The Greenback fell to a 33-month low and continue to lift the commodity complex. Since gold is priced in dollars, a weaker dollar makes gold less expensive in other currencies allowing it to rise. US yields moved lower following weaker than expected jobless claims.
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Technical analysis
Gold prices traded higher, pushing above resistance near the 50-day moving average near 1,871 which is now seen as support. Target resistance is now seen near the November highs at 1,960. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought. The current reading on the fast stochastic is 91, above the overbought trigger level of 80, which could foreshadow a correction. Medium-term momentum is positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.
Jobless Claims Rise more than Expected
Jobless claims rose by 885,000 in the week ending December 12, the most since September 5. Expectations were for claims to fall to 808,000. Initial claims for the previous week were revised higher by 9,000 to 862,000.