Price of Gold Fundamental Daily Forecast – Could Become Rangebound Ahead of New Tariffs on China, U.S. Non-Farm Payrolls Report

Gold futures are inching slightly better early Wednesday after hitting a more than one-week low the previous session. The main focus for traders remains concerns of an escalation in the trade dispute between the United States and China. Gold is also a completely dollar-driven market at this time.

At 0903 GMT, December Comex Gold futures are trading $1200.30, up $1.10 or +0.09%.

Gold and the U.S. Dollar are also showing a limited reaction to the weakness in emerging markets, which suggests the fears of contagion may be overblown.

We could be looking at a tight range today as investors await President Trump’s decision on additional tariffs against China. Traders are saying that fears of a hit to global growth from Trump’s ‘America First’ protectionist policies have kept markets in a state of heightened anxiety for much of this year.

According to a report from Bloomberg last week, Trump could follow through on plans to impose levies on $200 billion more of Chinese imports after a public comment period on his proposed new tariffs on Chinese goods is set to end on Thursday.

Expectations of additional Fed hikes in the future are also helping to limit gains. This assessment is being supported by solid U.S. economic data. On Tuesday, ISM Manufacturing PMI came in much better than expected at 61.3, versus a 57.6 forecast. Construction Spending was lower than expected at 0.1%, versus 0.5%. ISM Manufacturing Prices came in at 72.1, below the 74.0 forecast. IBD/TIPP economic Optimism was 55.7, versus a 57.2 estimate.

U.S. manufacturing activity accelerated to more than a 14-year high in August, boosted by a surge in new orders, but growing concerns over rising raw material costs as a result of import tariffs could restrain further growth.

The ISM described demand as remaining “robust,” but cautioned that “the nation’s employment resources and supply chains continue to struggle,”

Forecast

On Wednesday, investors will get the opportunity to react to the latest U.S. Trade Balance data. It is expected to rise to -50.2 Billion, up from -46.3 Billion.

Don’t be surprised by a sideways trade ahead of Thursday’s expected announcement of new tariffs on China and Friday’s U.S. Non-Farm Payrolls report.