Price of Gold Fundamental Daily Forecast – Direction Determined by Investor Sentiment

Gold prices are trading nearly flat early Monday after last week’s volatile sessions. Friday’s action in particular should be noted. Buyers attacked the upside aggressively, but sellers stopped the move slightly below a key top at $1307.00. Taking out this level could have triggered an acceleration to the upside.

The selling was strong enough to post a potentially bearish technical chart pattern that strongly suggests the buying may be greater than the selling at current price levels. This could put short-term pressure on the market early this week.

At 0500 GMT, December Comex Gold futures are trading $1291.10, down $0.50 or -0.04%.

The catalysts driving the price action last week were political and geopolitical events. However, the Fed minutes also had a say.

We can’t predict the political and geopolitical events, but we are fairly confident in how the markets will react. Anything that drives down demand for higher risk assets is likely to be supportive for gold. Any news that drive up demand for higher-yielding assets is likely to put pressure on gold.

In other news, according to the U.S. Commodity Futures Trading Commission, speculators raised their net-long position in COMEX gold futures and options for a fifth straight week in the week to August 15.

Forecast

There are no major economic reports on Monday so gold investors will likely we watching the news for any catalyst that could affect risk sentiment.

Gold has been particularly sensitive to the stock market lately so it could be underpinned if the summer sell-off in equities continues.

The key event this week is the central bankers’ symposium at Jackson Hole. The highlight of the symposium will be speeches by Fed Chair Janet Yellen and European Central Bank President Mario Draghi on Friday.

The trend is up according to the daily swing chart. A move through $1306.90 will signal a resumption of the uptrend. A trade through $1272.50 will change the trend to down. However, major support comes in at $1270.30 to $1259.00.

Minor support comes in at $1289.80 to $1285.80. Since the main trend is up, buyers may come in on a test of this zone.