Gold Price Prediction – Prices Drop as Yields Rise Following Jobless Claims Data

Gold prices reversed course and moved lower on Thursday, as the dollar gained traction and US treasury yields continued to move higher. Stronger than expected Jobless claims data helped buoy US yields which have moved to the highest levels seen in May 2020. Additionally, stronger than expected US existing home sales helped buoy yields sending bond prices lower and paving the way for lower gold prices.

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Technical analysis

Gold prices moved lower pushing through support near the 10-day moving average at 1,910 which is now seen as short-term resistance. Support is seen near the October lows at 1,872. Short-term momentum has whipsawed and turned positive after recently turning negative as the fast stochastic generated a crossover buy signal on the upper end of the neutral range. Medium-term momentum remains neutral to positive as the MACD histogram prints in the black with an upward sloping trajectory that points to a slow trend higher.

Jobless Claims Rise Less than Expected

US jobless claims totaled 787,000 last week, the lowest total since the early days of the coronavirus pandemic. Expectations had been for claims to rise by 875,000. The total reflected a decline of 55,000 from the downwardly revised 842,000 in the previous week.  In addition to the substantial drop in the headline number, continuing claims also showed another hefty decline. The level of those getting benefits for at least two weeks declined by 1.02 million to 8.37 million.