Gold Price Prediction – Prices Drop on Dollar Gains

Gold prices reversed course, moving lower following a surge in the price on Friday in the wake of the worse than expected jobs report. U.S. Treasury yields moved higher, which helped buoy the greenback, weighing on the yellow metal. Since gold is quoted in dollars, a stronger currency generally drives gold prices lower.

Tecnical analysis

Gold prices reversed course on Tuesday following the long holiday weekend. Prices tumbled to support seen near the 50-day moving average, at 1,796. Resistance is seen near the 10-day moving average at 1,809. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This buy signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

Data Picks up on Wednesday

Coming back from the Labor Day holiday, there was little new information driving the precious metals market. On Wednesday, the Labor Department will issue the JOLTs report, which will likely show an increase in the number of jobs available. The Fed Beige book will also be released which might shed light on the way the Fed will lean when it meets to decide monetary policy.