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Price of Gold Fundamental Daily Forecast – Gold Corrects Lower

By:
Colin First
Updated: Sep 12, 2017, 07:18 UTC

Gold prices gapped lower since the start of trading on Monday and they continued to move lower during the course of trading over the last 24 hours as the

Gold

Gold prices gapped lower since the start of trading on Monday and they continued to move lower during the course of trading over the last 24 hours as the risks receded and the stock markets rebounded after being under pressure for the whole of last week.

The gold prices had closed above the 1340 region for the last week and the way it traded on that indicated that it might move higher. But this latest leg of the bullish run was more due to the increase in global risks and uncertainties as reports emerged during the course of last week that North Korea would be launching a missile over the weekend to mark its National Day.

Also, Hurricane Irma was sweeping through parts of the US and it was feared that it would cause widespread destruction in Florida and other areas. But it turned out to be a quiet weekend in the Korean region with no signs of any tension and this was a huge relief to the markets and the traders and the gold prices gapped low yesterday as it opened below 1340. It continued to trade under pressure during the first half of the day and as the US session opened, the dollar began to recover.

Gold Jim Hourly
Gold Jim Hourly

Hurricane Irma weakened a lot and it was categorized as a storm which meant that the destruction caused by it would be much lower than what was expected. This helped the dollar to recover across the board and this caused the gold prices to weaken further and its trades in the 1325 region as of this writing.

It remains to be seen whether this is only a correction of the uptrend in gold or whether we are going to see a full recovery in the dollar. The relief is palpable in the markets and this is likely to last for a day or 2 before the focus shifts back to the fundamentals and the economic news as well. We should see the gold prices hold on in the short term and the data from the US later in the week should reveal the next short term direction for the gold prices.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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