Price of Gold Fundamental Daily Forecast – Could Have Enough Upside Momentum to Challenge $1303.40

Gold prices are trading at their highest level since November 29 and rapidly approaching a key technical level at $1301.10 and the November 27 main top at $1303.40 shortly before the opening on Friday. Volume is extremely light with trading conditions expected to slow down throughout the day.

Gold is also on track for its best month since August. The market is being supported by a weaker U.S. Dollar and strong technical momentum.

Fund buying is increasing and the market is also receiving support from strength in outside markets. Palladium has seen the strongest rise this year, climbing more than 57 percent as concerns grew over availability after years of market deficit.

In the U.S. on Thursday, weekly unemployment claims came in higher than expected at 245K, matching last week’s read. Traders were looking for 240K.

The Goods Trade Balance rose more than expected to -69.7 billion. The forecast was for a read of -67.7 billion. Last month’s figure was 68.1 billion.

Preliminary Wholesale Inventories were worse than expected, increasing 0.7%. The forecast was for an increase of 0.4%. Last month’s number was revised to the better at -0.5%.

Finally, Chicago PMI posted a robust 67.6, beating the 62.2 forecast and last month’s 63.9.

Due to the thin trading conditions, we’re not sure how the gold market will react today to a test of $1303.40. I suspect that if trend traders remain in control, buyers will take out this price and could make a move on the next key technical level at $1317.10. Or, they could decide to pack it in for the long holiday week-end and book profits due to worries over uncertainty at the start of trading next week.