Gold Prices Depreciate When Treasury Yields Increase

On Thursday, gold prices fell as the currency gained strength. Treasury rates have continued to rise in the aftermath of a strong jobless claims data. The yield differential widened in favor of the Euro and the Yen, exerting downward pressure on the dollar. For April, the Philadelphia Fed reported a weaker-than-expected reading of 17.6, compared to forecasts of around the trailing year-to-date average of 21.

Initial Jobless Claims were 184,000 for the week ending April 16, down 2,000 from the previous week but well ahead of expectations of 182,000. Continuing claims, which are released one week after the headline figure, decreased by 58,000 to 1.417 million, the lowest level since February 21, 1970. 

Technical Evaluation

On Thursday, gold prices fell. Prices were unable to break through resistance near the 1,958-day moving average. At 1,933, support is located near the 50-day moving average.

Momentum has shifted negative in the short term as the Fast Stochastic generated a crossover sell signal. Both the RSI and the Fast Stochastic are in the neutral zone, indicating that the gold price has been consolidating.

The MACD has generated a crossover sell signal, indicating that the medium-term momentum has become negative. As the MACD line crosses below the MACD signal line, this occurs. The MACD (moving average convergence divergence) histogram exhibits a downward trend, indicating decreasing prices and accelerating downward momentum.