Gold Price Prediction – Prices Continue to Rebound Despite Rising Dollar
Gold prices moved higher on Thursday, despite a continued rally in the US dollar. The dollar index hit a fresh 3-month high, which is generally negative for gold prices. The euro is also trading under pressure, allowing gold prices in Euros to surge nearly 1%. US yields moved higher following a larger than expected drop in US jobless claims. With the coronavirus continuing to spread throughout China and the potential for the Hong Kong government to shut the border to China, gold prices should remain buoyed.
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Technical Analysis
Gold prices continued to rally for a second consecutive session pushing through resistance which is now seen as short term support near the 20-day moving average at 1,564. Additional support is seen near the 50-day moving average at 1,522. Target resistance is seen near the January highs at 1,611. Prices failed to break out of a cup and handle continuation patterns and are back in a sideways consolidation pattern.
Short term momentum has turned negative. The fast stochastic generated a crossover sell signal and is now accelerating lower. The RSI (relative strength index) has stabilized in the middle of the neutral range which points to continued consolidation. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.
Jobless Claims Tumble
The Labor Department reported on Thursday that US jobless claims fell 15,000 to 202,000 for the week ended February 1. This is the lowest reading since last April. Claims data for the prior week was revised to show 1,000 more applications received than previously reported. Expectations had been for claims to dip slightly to 215,000. The four-week moving average of initial claims, fell 3,000 to 211,750 last week, also the lowest level since last April.
This article was originally posted on FX Empire
