Price of Gold Fundamental Daily Forecast – Comments from FOMC Member Bostic Could Trigger Volatile Reaction

The daily chart suggests that momentum is building to the downside with the February 8 bottom at $1309.00 a reasonable target.
James Hyerczyk
Comex Gold
Comex Gold

Gold futures are under pressure early Thursday, driven lower by a strengthening U.S. Dollar. The catalyst helping to weaken gold is the minutes from the January U.S. Federal Reserve meeting which showed policymakers are confident in the need to keep increasing interest rates throughout the year.

At 0830 GMT, April Comex Gold futures are trading $1324.30, down $7.90 or -0.59%.

Gold prices were hit hard on Wednesday, extending their losses from last week, helped by the Fed minutes and by higher short-term Treasury yields.

The minutes also showed that Fed policymakers had a more upbeat take on inflation. This should raise expectations that the central bank will likely raise interest rates in March. The price action in Fed Funds futures also indicated that three rate hikes are now almost fully priced in for this year, compared to two as recently as December.

Daily April Comex Gold


The direction of gold prices the rest of the day should be dictated by the movement in the U.S. Dollar.

The daily chart suggests that momentum is building to the downside with the February 8 bottom at $1309.00 a reasonable target. This is followed by a major 50% to 61.8% retracement zone at $1306.60 to $1291.50.

The market is also trading on the weak side of a short-term retracement zone at $1330.20 to $1336.70. Trading below this resistance area is also helping to give the market a downside bias.

On Thursday, traders will get the opportunity to react to Weekly Unemployment Claims. It is expected to come in at 230K, the same as the previous week.

The Conference Board’s Leading Index is expected to increase slightly by 0.7%.

Earlier today, FOMC Member Quarles gave a speech in Tokyo. His comments didn’t deviate from what the Fed has been saying, and came out in line with Wednesday’s minutes. In other words, investors should look for further gradual rate increases.

Later today, FOMC Members William Dudley and Raphael Bostic are scheduled to speak. Investors are hoping they shed some light on the frequency and number of rate hikes in 2018. In early January, Bostic said three rate hikes in 2018 may be too much. Gold prices could weaken further if Bostic changes his outlook to a little less dovish or a little more hawkish.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.