Price of Gold Fundamental Daily Forecast – Dovish Janet Yellen Could Provide Much Needed Boost

Gold futures are trading higher on Tuesday after finding support slightly above the major value zone at $1780.50 to $1705.20 that is controlling the longer-term direction of the market.  Traders are saying the catalyst behind the move is hopes of further global stimulus to stem the economic toll from the COVID-19 pandemic and a weaker U.S. Dollar.

At 09:35 GMT, February Comex gold is trading $1842.30, up $12.40 or +0.68%.

US Stimulus Efforts

There is no major economic data on Tuesday with most traders likely positioning themselves ahead of the inauguration of President-elect Joe Biden on Wednesday on the hopes that he reveals more details of his plan to provide stimulus to a weakening economy. Last Thursday, Biden revealed a huge $1.9 trillion stimulus package proposal designed to jump-start the virus-stricken economy.

International Moves to Revive the Global Economy

Reuters is reporting that Euro Zone finance ministers pledged continued fiscal support for their economies on Monday and discussed the design of post-pandemic recovery plans as the European Commission warned the COVID-19 crisis was making the bloc’s economic imbalances worse.

Additionally, the head of the International Monetary Fund said the global leader needed more resources to help heavily indebted countries, citing a highly uncertain global economic outlook.

Daily Forecast

Ahead of the regular session opening in the U.S. at 13:00 GMT, traders are reacting to the U.S. Dollar Index that is trading lower after hitting a four-week high on Monday. Benchmark 10-year Treasury yields were range-bound, but held above 1%.

In order to get gold moving to the upside, both the U.S. Dollar and Treasury yields are going to have to come down from current price levels.

Traders should also pay attention to the speech by U.S. President-elect Joe Biden’s nominee to run the Treasury Department, Janet Yellen. She is expected to tell the Senate Finance Committee on Tuesday that the government must “act big” with its next coronavirus relief package.

In her prepared testimony, Yellen also says the U.S. economy must be rebuilt “so that it creates more prosperity for more people and ensures that American workers can compete in an increasingly competitive global economy.”

A Biden ally said Yellen’s confirmation is expected to be among the least controversial of Biden’s picks to fill key roles in his administration, but that she would still be likely to face questions over his tax and spending proposals.

For a look at all of today’s economic events, check out our economic calendar.