Gold prices tumbled but closed off the lows of the session following news that Donald Trump said he hoped the Federal Reserve would not raise interest rates. Initially the yellow metal was on the defensive as stronger than expected jobless claims and a robust Philly Fed survey buoyed the greenback generating headwinds for gold prices. The trend remains downward with target support near the July 2017 lows at 1,204. Resistance on the yellow metal is seen near the 10-day moving average at 1,241. Momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices. The fast stochastic generated a crossover buy signal in oversold territory which points to a potential rebound. The RSI (relative strength index) is printing a reading of 25, below the oversold trigger level of 30 which could foreshadow a correction.
President Donald Trump said Thursday he hoped the Federal Reserve would curtail raising interest rates. The Fed is suppose to be an independent institution, and its very unusual that a President would comment on the Feds action. “I am not happy about it,” Mr. Trump said during an interview conducted Thursday by CNBC.
Jobless Claims are Strong
U.S. initial jobless claims fell another 8k to 207k in the week ended July 14, the lowest since December 1969, after tumbling 17k to 215k in the July 7 week which was revised from 214k with the big decline likely impacted by the Independence Day holiday. The 4-week moving average declined to 220.5k from 223.25k. Continuing claims rose 8k to 1,751k in the July 7 week after edging up 1k to 1,743k at the end of June.
U.S. Philly Fed manufacturing index bounced
U.S. Philly Fed manufacturing index bounced 5.8 points to 25.7 in July after tumbling 14.5 points to 19.9 in June. The latter was the lowest since the 10.0 reading in November 2016. It was 23.2 a year ago. Components were mixed, but mostly improved. The employment numbers were the exceptions, with the job index dropping to 16.8 from 30.4, with the workweek at 13.7 from 24.2. New orders climbed to 31.4 from 17.9. Prices paid increased to 62.9 from 51.8, with prices received at 36.3 from 33.2. The 6-month general business activity index declined to 29.0 from 34.8. Components for the 6-months ahead showed employment at 27.5 from 34.1, new orders at 28.3 from 38.2, prices paid at 59.7 from 62.6, and capital expenditures at 31.4 from 36.5.