Gold Price Prediction – Prices Slip as the Dollar Gains Traction
Gold prices reversed course on Thursday as the dollar gained traction and US yields moved lower. The Biden Administration accounted that they planned to raise taxes on capital gains which weighe on equity prices, and helped the yellow metal remain buoyed. Jobless claims were stronger than expected but failed to buoy US yields.
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Technical analysis
Gold prices moved lower on Thursday but the trend remains upward sloping and headed for resistance near a Fibonacci retracement level of 38.2%, which is seen near 1,828. Target resistance on the yellow metal is seen near the February highs at 1,855. Support is seen near the 10-day moving average at 1,762. The 10-day moving average has crossed above the 50-day moving average which means that a short-term up trend is now in place. Short-term momentum reversed and turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 87, above the overbought trigger level of 80. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram is printing in positive territory with a declining trajectory which points to consolidation.
Jobless Claims Fall More than Expected
Jobless claims totaled 547,000, well below the forecast for 603,000 and a new low for the Covid-19 pandemic era. Continuing claims, which run a week behind the headline data, also fell, dropping 34,000 to 3.67 million, a fresh pandemic low and another indication that conditions are thawing.