Gold Price Prediction – Prices Drop Unable to add to Recent Gains
Gold prices moved lower on Thursday while the dollar remained steady and US yields consolidated. This comes as the US Labor Department reported a slightly larger than expected increase in jobless claims. Also on the economic docket the US reported a larger than expected decline in April existing home sales.
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Technical analysis
Gold prices moved lower, unable to break out to new highs, after hitting a fresh 7.5-year high on Wednesday. The dollar edged slightly higher generating headwinds for the yellow metal. Prices seemed to hold support near the 10-day moving average at $1723. Resistance is seen near the May highs at $1,765. Short-term momentum has turned negative as the fast stochastic recently generated a crossover sell signal in overbought territory. Medium-term momentum has also turned negative as the MACD (moving average convergence divergence) index recently generated a crossover sell signal. This 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).
Jobless Claims Rise
New Jobless Claims in the US totaled 2.44 million last week according to the labor department. Expectations were for a rise of 2.4 million. Last week’s numbers were revised lower from 2.98 million to 2.69 million. In the nine weeks since the coronavirus-induced lockdown has closed large parts of the U.S. economy, some 38.6 million workers have filed claims.