Gold prices formed an outside day in a tight range and continued to trade sideways. The dollar edged higher despite as Treasury yields moved higher. The gold ETF moved sideways. The 2-year yield rose as unit labor costs rose more than expected and productivity in the United States slumped. This is another sign of inflation that has failed to buoy the price of the yellow metal.
Gold prices edged higher through short-term resistance, which supports near the 10-day moving average at 1,783. 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 1,793. 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. Medium-term momentum has turned negative as the MACD (moving average convergence divergence index) generated a crossover sell signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line.
Productivity Declined More than Expected
Productivity declined 5.2% in the prior quarter, worse than the estimate for a drop of 5%. This measure of output was The slide happened as output increased 1.8% while hours worked rose 7.4%. On a year-over-year basis, productivity fell 0.6%, which itself was the biggest decline since the second quarter of 1993.
This article was originally posted on FX Empire