Price of Gold Fundamental Daily Forecast – Traders eyeing Weaker Equities, Lower U.S. Dollar
December Comex Gold futures are trading slightly higher early Monday, underpinned by weaker U.S. equities and slightly lower U.S. Dollar. Foreign investors are attributing gold’s early strength to political uncertainty in the United States.
U.S. equity indexes are being dragged lower by a dip in Asian securities as investors book profits after recent gains. The dollar is still being pressured by lower Treasury yields and a stronger Euro which is nearing a two-year high against the Greenback.
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The news over the week-end seemed to be all about the Trump administration. Political woes continue to dampen hopes for quick passage of President Donald Trump’s stimulus and tax reform agendas especially after Republican senators postponed a vote to repeal Obamacare and introduce their own health care plan.
The White House said on Sunday that Trump was open to signing legislation toughening sanctions on Russia after Senate and House leaders reached agreement on a bill late last week.
Also this week, perhaps as early as Tuesday, U.S. republican Senators may hold a procedural vote to take up legislation to repeal or replace Obamacare, but it remains unclear which version of the bill senators would vote on.
In other news, according to the Commodity Futures Trading Commission, hedge funds and money managers increased their net long position in COMEX gold for the first time in six weeks in the week to July 18.
On Monday, investors will get the opportunity to react to the latest U.S. Flash Manufacturing PMI and Flash Services PMI reports as well as Existing Home Sales. Disappointing reports should be supportive for gold because it will further dampen the chances of a third rate hike by the Fed later this year.
Gold traders will also be watching the stock market. Any signs of selling of risky assets will be supportive for gold prices.