Gold prices rebounded on Thursday as the dollar continued to drop and US yields moved higher. The rally in yields came despite a larger than expected increase in US jobless claims. The dollar has declined for an 8-straight trading session but the decline in the greenback has failed to lift the yellow metal. Generally, since gold is priced in dollars, a drop in the dollar equates to a rally in gold prices. US equities took a breather which appears to be the reason gold prices rallied Thursday
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Gold prices rallied more than 1% after falling 1.8% on Wednesday. Support is seen near the 50-day moving average at $1,696. A break of this level would lead to a test of the May lows at $1,682. Resistance is seen near the 10-day moving average at $1,721. Short term momentum is negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is also negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices.
US Jobless Claims Rise More than Expected
US initial jobless claims rose 1.877 million last week compared to expectations that claims would rise by 1.77 million. The Labor Department’s total nevertheless represented a decline from the previous week’s upwardly revised total of 2.126 million. Filings under the Pandemic Unemployment Assistance program totaled 623,073. This was the first time the government’s weekly jobless claims report came under 2 million since the week ended March 14. Continuing claims, totaled 21.5 million, a gain of 649,000 over the past week, also worse than expected.
This article was originally posted on FX Empire
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