Gold Price Prediction – Prices Fall as the Dollar Gains Traction

Gold prices moved lower as the dollar gained traction following stronger than expected jobs data. The U.S. Yield curve flattened but yields moved higher as jobless claims hit a  50-year low. Continuing claims continued to decline. All eyes are on the consumer price index expected to be released on Friday by the U.S. Labor Department.

Technical Analysis

Gold prices moved lower on dollar strength. Support is seen near the 10-day moving average at 1,780. Additional support on the yellow metal is seen near the September lows at 1,721. Resistance is seen near the 50-day moving average at 1,795. The 10-day moving average has crossed below the 50-day moving average, which means a short-term downtrend is in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold. The fast stochastic is printing a reading of 17.5.  Medium-term negative momentum has decelerated as the MACD histogram is printing in negative territory with a rising trajectory which points to consolidation.

Jobless claims tumbled 43,000 to 184,000 for the week ended December 4, the lowest level since September 1969. Expectations were for claims to rise to 215,000 applications for the latest week. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 21,250 to 218,750, the lowest level since March of 2020.