Gold Price Prediction – Gold Surges and Poised to Break Out as US Yield Decline

Gold prices moved higher on Thursday and but remains in a range. The lower low and higher-high have generated an outside day which is usually a sign of a trend reversal. The trend was neutral, which somewhat nullifies the outside day. The breakdown in the 2-year yield to 13-basis points dragged on the 10-year yield which generated headwinds for the dollar and buoyed gold prices. Traders should carefully watch the breakdown in US yields as they may be the impetus for a gold breakout.

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Technical Analysis

Gold prices rebounded sharply generating an outside day but continue to trade in a rangebound pattern. Prices sliced through but the 10 and 20-day moving average which is former resistance now support seen near the  20-day moving average 1,706. Target resistance is seen near the April highs at 1,747. The weekly chart of gold prices is forming a bull flag pattern which is a pause that refreshes higher.

Short term momentum on gold prices has turned positive as fast stochastic generated a crossover buy signal in the middle of the neutral range. This follows a day where the fast stochastic generated a sell signal which is likely a signal of further consolidation. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices.

US Jobless Claims Continue to Tumble

US jobless claims came in at 3.17 million last week, bringing the total to 33.5 million over the past seven weeks, according to the Labor Department. The total was slightly higher than the 3.05 million expected and below the previous week’s 3.846 million, which was revised up by 7,000.