Price of Gold – Fundamental Forecast, April 26, 2017

June Comex Gold futures continue to feel the pressure from increased demand for higher-yielding assets. Then weaker U.S. Dollar doesn’t seem to be influencing the price action either.

Although some investors believe the threats from North Korea are still underpinning the market, the story seems to have taken a backseat this week. Traders may be focusing on the rise in U.S. equities, and the announcement of President Trump’s tax reform plan.

The results of the first round of the French presidential election and the lack of drama in the process are also weighing on prices.

Later in the week, gold may get some support as the U.S. Congress debates the possible shutdown of the government this week-end.

Forecast

Support for gold prices could continue to erode on Wednesday for numerous reasons including the easing of tensions over North Korea and limited political concerns over the French election.

Currently, the possibility of a government shut is also receding after President Donald Trump backed away from a demand that Congress include funding for his planned border wall with Mexico in a spending bill.

Barring any surprises from geopolitical events, it looks as if gold prices will continue to drift lower today.

Technical factors could play a role in a possible reversal to the upside because today’s session begins with the market in an oversold position. Traders should also watch the price action in the U.S. Dollar. It is also oversold. If it bottoms on profit-taking and a short-covering rally begins then we could see selling in gold escalate.

North Korea will continue to be the wildcard although it seems diplomatic negotiations are working to calm the situation.