Price of Gold Fundamental Daily Forecast – Early Trade Shows Investors Defending $1287.50 Main Bottom

Gold futures are trading mixed on Friday, but the price action merely suggests the buying is probably being driven by profit-taking and buyers stepping in to defend the March 7 bottom. Earlier in the session, prices were under pressure because of the big three:  a stronger U.S. Dollar, firmer Treasury yields and an increased demand for higher risk assets.

At 10:02 GMT, June Comex gold is trading $1295.30, unchanged.

The market is in a position to post its worst monthly loss since August 2018. As of Thursday’s close, the market was down 1.8 percent in March. Additionally, gold is expected to post its first weekly loss in four. Looking at the market from a quarterly perspective, however, gold is set to post its second straight gain. The strength during the first quarter is being fueled by a dovish U.S. Federal Reserve and worries about a global economic slowdown.

Fundamentally, the key story is the strong U.S. Dollar and its negative influence on demand for dollar-denominated gold. This month, the dollar has been supported by a couple of factors including flight-to-safety buying and optimism that the resumption of trade talks between the United States and China may lead to a long-awaited trade deal.

Traders should also pay attention to the Euro because its weakness is driving the U.S. Dollar Index higher.

Daily Forecast

If the buying is strong enough today to generate a higher close then look for the start of a 2 to 3 day counter-trend rally. However, a lower close will indicate there is still work to do on the downside.

If the U.S. Dollar, stocks and Treasury yields continue to rise then look for gold to remain under pressure. Weakness in the dollar especially, will likely fuel an intraday short-covering rally.

Traders face a mountain of U.S. data today that could influence gold prices. Furthermore, Fed speakers could also generate some volatility. There are no major reports, but the mid-major reports include Core PCE, Personal Spending, Chicago PMI and Revised University of Michigan Consumer Sentiment. Minor reports include Personal Income and New Home Sales.