Gold Price Prediction – Prices Ease Following Robust Jobs Report

Key Insights

• Gold prices traded lower following a strong employment report. 
• The dollar shot higher. 
• Treasury yields rose despite moderating wage growth. 

Gold prices eased on Friday in the wake of the jobs report. Prices were unable to pierce through key resistance.

The dollar moved higher as yields increased, pushing the interest rate differential in favor of the greenback.

Benchmark yields rose following the stronger than expected jobs report. The ten-year yield is higher, pushing back through the 2.90% level.

US job creation continued to impress in May. Non-farm payrolls rose by 390K while the unemployment rate moved to 3.6%. Expectations were for the jobs market to expand by about 328K jobs. The unemployment rate was expected to decline further to 3.5%.

There was a combined downward revision of -22K jobs in March and April, with most of the downward revision coming in March. Private sector jobs grew by 333K jobs in May

Technical Analysis

Gold prices eased. Prices tested support near the 10-day moving average at 1,854.

Resistance is seen near the 200-day moving average of 1894.

Short-term momentum turns negative as the Fast Stochastic generates a crossover sell signal. Prices are neither overbought nor oversold as the fast stochastic prints a reading of 76.

Medium-term momentum turns positive as the MACD generates a crossover buy signal. This occurs as the 12-day moving average minus the 26-day moving average crosses below the 9-day moving average of the MACD line.

The  MACD (moving average convergence divergence) histogram has a positive trajectory pointing to higher prices.