Price of Gold Fundamental Daily Forecast – Gold Rally Stalls After Stocks Recover from Steep Losses

Gold prices are up on Tuesday, underpinned by safe haven buying fueled by another steep sell-off in the global equity markets. Gold is seen as a safe-haven investment due to its ability to retain value even at times of financial or political uncertainty. It is also used as a hedge against inflation.

At 0756 GMT, April Comex Gold futures are trading $1345.70, up $9.20 or +0.69%.

Gold is currently in an uptrend despite two weeks of sideways to lower price action. A trade through $1329.10 will change the main trend to down. The key resistance level is $1349.80. The market could surge to the upside if buyers talk out this level with conviction.

The early rally in gold has stalled due to the strong comeback in U.S. equity markets. If the stock market sell-off were to continue and generate enough downside momentum to take out the early session lows then I expected to see gold prices breakout over $1349.80.

If stocks make a full recovery and turn higher for the session, gold prices are likely to be pressured. However, I don’t think sellers will take out $1329.10 unless Treasury yields post a new high for the week.

In economic data on Monday, ISM Non-Manufacturing PMI came in at 59.9, higher than the 56.5 forecast and the previously reported 55.9.

On Tuesday, investors will be watching the U.S. Trade Balance number, due to be released at 0806 GMT. It is expected to come in at -52.1 billion. This is slightly greater than the previously reported -50.5 billion. Due to the weaker U.S. Dollar in January, there may be a positive surprise in this report.

The JOLTS Job Openings report is expected to rise to 5.95M, up from 5.88M. The IBD/TIPP Economic Optimism report is expected to come in at 55.4, up slightly from 55.1. Of course, this survey was taken before the steep sell-off in the equity markets and the threat of rising interest rates.