Price of Gold Fundamental Daily Forecast – Economic Data, Tariffs Could Drive Dollar, Gold Prices Today
A weaker U.S. Dollar is helping to support gold prices early Thursday. Strong physical demand from Asia is also helping to underpin the precious metal. After spiking to the upside earlier in the week, the dollar has stabilized a little on profit-taking. This is helping to push gold prices higher because a weaker dollar tends to increase foreign demand for the dollar-denominated commodity.
At 0857 GMT, December Comex Gold futures are trading $1208.10, up $6.90 or +0.57%.
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The dollar has been weakening this week despite trade concerns, which are making investors jittery. Investors are nervous with a deadline looming in the U.S.-China trade dispute.
Gold has been pressured throughout the year due to expectations of rising interest rates and global trade tensions, which have sent investors into the safety of the U.S. Dollar. However, since August 16, gold prices have been moving higher as aggressive sellers began to lift record short positions.
Today’s early price action suggests that the short-covering may be resuming. The key area to watch is $1205.90 to $1215.10. Currently, the market is trading inside this zone. Trader reaction to this zone could set the tone for the rest of the session.
A sustained move over $1215.10 will indicate the buying is getting stronger. A sustained move under $1205.90 will signal that sellers have regained control.
Furthermore, a trade through $1220.70 will signal a resumption of the uptrend. A trade through $1189.50 will change the main trend to down.
As far as demand is concerned, India and China have been active, other Southeast Asian countries have also been buying gold for investment purposes.
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Forecast
The direction of gold today will likely be determined by the U.S. Dollar. Potentially influencing its direction will be Fed speakers and fresh U.S. economic data. We could also see potential surprise events pertaining to tariffs and trade disputes.
The major U.S. reports are ADP Non-Farm Employment Change and ISM Non-Manufacturing PMI. The ADP report is expected to show the private sector added 195K jobs in August. The services PMI report is expected to come in at 56.8, up from 55.7.
If the dollar or gold show no reactions to the economic data then this will indicate that traders are likely sitting on the sidelines ahead of Friday’s U.S. Non-Farm Payrolls report.