Price of Gold Fundamental Daily Forecast – Could Remain Rangebound Until Comey Testifies Next Week

Gold surprisingly closed higher on Thursday despite a firmer U.S. Dollar, rising equity prices and a plunge in crude oil prices.

August Comex Gold futures finished the session at $1259.80, up $3.30 or +0.26%.

If you want to understand gold at this time, you’re going to have to look at the charts and the technical picture as well as the fundamentals.

Technically, gold is in a downtrend, but the market has been moving higher since bottoming at $1217.80 on May 9.

Additionally, the market has been running into resistance inside a major retracement zone at $1259.10 to $1268.80. Last week, it formed a potentially bearish closing price reversal top at $1268.30, but the chart pattern hasn’t been confirmed.

Based on the price action, the direction of the gold market over the near-term is going to be determined by trader reaction to $1259.10 and $1268.80.

A sustained move under $1259.10 will tell us that sellers are winning the battle. A sustained move over $1268.80 will tell us that the buying is getting stronger.

The fundamentals will tell us what is holding the gold market in a range.

Gold is probably being capped by expectations of a Fed rate hike in June and increasing demand for higher risk assets.

Gold is likely being underpinned by the problems surrounding President Trump and worries that he won’t be able to implement his economic agenda.

There should be some light shed on Trump’s problems next week when former FBI Director James Comey testifies before the Senate Intelligence Committee. He expected to say a few negative things against Trump. If this causes more problems, then gold is likely to breakout over $1268.80.

If Comey doesn’t implicate Trump any further then gold is likely to break.

I am not expecting gold to move too much today ahead of Monday’s U.S. bank holiday and Comey’s testimony, but if you’re going to short-term trade then watch the price action and read the order flow at $1259.10 all session. Trader reaction to this price will tell us if the buying is getting stronger, or if the sellers are retaking control.