Price of Gold Fundamental Daily Forecast – Supported as End-of-Month Position-Squaring Weighs on Dollar

Gold futures are starting to move higher ahead of the regular session opening as investors take advantage of the weaker U.S. Dollar ahead of the unveiling of the Democrats new stimulus package and Tuesday evening’s presidential debate. Nonetheless, the bullish mood looks a bit dampened as investors appear to be leaning towards U.S. tech stocks rather than gold and with no further action from U.S. Federal Reserve expected until early November.

At 11:47 GMT, December Comex gold is trading $1892.10, up $9.80 or +0.52%.

Dollar Slips; Markets in Wait-and-See Mode Before US Presidential Debate

The U.S. Dollar Index slipped from recent two-month highs on Tuesday, as markets waited for the first debate between the U.S. presidential candidates, signs of progress in fiscal stimulus talks, and economic data including German inflation.

After racking up its biggest weekly gains since early April last week as markets turned cautious and sought safer assets, the dollar gave up some gains on Monday and edged down further on Tuesday, ahead of the debate between President Donald Trump and Democratic challenger Joe Biden.

The 90-minute televised debate at 01:00 GMT will be watched by investors looking for a steer on the candidates’ prospects, Reuters reported.

New Stimulus Proposal from the Democrats

U.S. House of Representatives Speaker Nancy Pelosi said on Monday that Democratic lawmakers were unveiling a new $2.2 trillion fiscal stimulus bill, which she said was a compromise and less costly as it covers a shorter period of time.

Daily Forecast

Technical factors are also boosting gold prices on Tuesday with the market attempting to breakout to the upside of a three-day range. The level controlling the direction of the market today is $1889.70. Overtaking this level with conviction could trigger a surge into at least $1917.40.

Ahead of tonight’s debate, expectations are that an increase in Trump’s perceived chances to win the election will likely boost the U.S. Dollar, which would then weigh on dollar-denominated gold.

Some traders are also saying that end-of-the-month position-squaring and profit-taking is helping to generate the pressure on the U.S. Dollar, but the greenback is likely to resume its rally after the first of October. This could put a cap on gold prices.

For a look at all of today’s economic events, check out our economic calendar.