Gold Price Fundamental Daily Forecast – Pressured as Yields Rise Ahead of Personal Spending, Income Data

Gold futures are down about 1% shortly before the release of a slew of U.S. economic reports on Friday. Today’s early selling pressure is being fueled by a surge in U.S. Treasury yields and a stronger U.S. Dollar.

The price action suggests investors may be giving up on the notion of a slowdown in monetary tightening starting in December as immediate focus shifted back to next Wednesday’s widely expected 75-basis point rate hike.

At 10:15 GMT, December Comex gold futures are trading $1651.60, down $14.00 or -0.84%. On Thursday, the SPDR Gold Shares ETF (GLD) settled at $154.76, down $0.22 or -0.14%.

Gold futures are now trading lower for the week after giving up earlier gains that were fueled by speculation the Fed would slow its aggressive rate-hike pace in December, amid some signs of a U.S. economic slowdown. But that idea may have been put to bed at least temporarily with the release of a report on Thursday showing stronger-than-expected U.S. economic growth in the third quarter.

Additionally, bets for rising rates overall have put gold on course for a seventh straight monthly decline.

Treasury Yields Rise as Investors Digest GDP Report

U.S Treasury yields are on the rise on Friday, erasing some of Thursday’s loses as the financial markets absorbed stronger than expected gross domestic product growth and looked ahead to a boatload of economic releases later in the day.

The yield on the 10-year Treasury note was at 4.014%, up about 7 basis points after dipping by as much as 11 basis points on Thursday. The 2-year Treasury note yield was last up by 6 basis points to 4.379%. It had fallen by around 12 basis points on Thursday.

GDP data released on Thursday showed that the U.S. economy grew by 2.6% in the third quarter. That was above the 2.3% growth predicted by economists in a Dow Jones survey.

The Advance GDP Price Index, however, retreated from 5.3% to 4.1%, suggesting that inflation may be starting to ease.

Dollar Recovering but Still Down for Week

The jump in Treasury yields is boosting the appeal for the U.S. Dollar against a basket of major currencies on Friday This is helping the index to recover some of this week’s steep losses, nonetheless, it’s still likely to finish the week sharply lower.

Unfortunately, investors failed to take advantage of the greenback’s weakness and dollar-denominated gold’s gains were capped.

Daily Outlook

Traders will get the opportunity to react to a slew of U.S. economic data that could influence Fed policy at next week’s two-day meeting.

Personal spending and income figures are expected on Friday. Investors will be looking at the data to assess how persistent inflation and interest rate hikes are affecting consumers.