Price of Gold – Fundamental Forecast, March 23, 2017

Gold futures are trading lower early Thursday, pressured by a slight recovery in the U.S. Dollar against a basket of currencies. On Wednesday, prices hit a 3-week high on fears that President Trump will not accomplish any of his campaign promises in a timely manner.

At 0749 GMT, June Comex Gold was trading at $1250.20, down $2.60 or -0.21%.

Traders will be paying close attention today to whether Trump can gather enough support in a vote to pass a bill to roll back Obamacare. This is considered a first major test of his legislative ability and whether he can keep his promises to business to deliver tax reform and relaxed regulations.

Trump and Republican House of Representatives leaders are looking for votes to help them overturn Obamacare and present their own plan for healthcare.

Gold investors are expecting a rough ride today because the vote will be close. The outcome of the vote could affect Trump’s efforts to push forward with his plans to cut taxes and boost infrastructure spending.

If Trump and the Republicans fail then this could put pressure on stock prices which could send more investors into the safe-haven gold market.

Gold is under a little pressure in the pre-market session because investors are reacting to news that the chances of getting an Obamacare replacement bill passed by the House of Representatives improved late Wednesday. Reportedly, the White House is offering a late-minute change to the plan by dropping a set of minimum benefits health insurers are now required to provide customers.

According to the House’s conservative Freedom Caucus, this issue has been seen as a major concern because it is being blamed as the main reason for the sky-rocketing cost of insurance. Essentially, the Republicans have offered to eliminate “essential health benefits”.

If this news pleases the opposition then resistance to passage of the House Republican healthcare reform bill will fall apart, and the bill will garner the necessary votes for passage. This would likely cause a recovery in the stock market and encourage gold investors to take profits following this week’s surge and trim their speculative positions.

If the Republicans fail to pass their new healthcare legislation, then June Comex Gold could surge to the upside with $1268.10 the next major upside target. If the Republicans succeed then look for a break back into $1241.30 to $1233.10. Trader reaction to this zone will determine the near-term trend of the market.