Price of Gold Fundamental Daily Forecast – Traders Showing Little Reaction to Fresh Tariffs

Gold prices are trading lower shortly before the regular session opening. The market is under pressure early Tuesday as investors moved money into the safe-haven U.S. Dollar after the U.S. imposed a fresh round of tariffs on Chinese imports.

On Monday, President Trump said that he will impose 10 percent U.S. tariffs on about $200 billion worth of Chinese imports, effective September 24.

Trump also said that if China takes retaliatory action against U.S. farmers or industries, “we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.”

Despite the threat from Trump, the focus will shift towards China’s response to the announcement. Most analysts expect China to attempt to disrupt the U.S. supply chain with components for technology devices an obvious target as well as raw materials used to make certain devices. Furthermore, the country may even announce the cancellation of trade talks.

At 1016 GMT, December Comex Gold settled at $1203.40, down $2.40 or -0.21%.

Forecast

Gold may be under pressure early Monday, but we’re not seeing aggressive shorting. This suggests the tariff news may have already been priced into the market. Furthermore, we’re not really seeing the shedding of risky assets with U.S. stocks trading higher after recovering from early session losses. Additionally, the USD/JPY is also trading higher. This is further evidence that investors aren’t being too rattled by the tariff news.

If the trade tariffs become a muted issue today then investors will shift their focus on the direction of U.S. Treasury yields. If yields rise then then will be another sign that investors aren’t seeking protection from the uncertainty one would expect from an escalating trade warm. It may also be an indication that investors are already looking ahead to next week’s widely expected 25 basis point rate hike by the Fed.

Technically, the key resistance area remains the 50% level at $1205.90 to th3 61.8% level at $1215.10.

If traders give up on the upside then prices may retreat into the short-term retracement zone at $1193.90 to $1187.60.