Price of Gold Fundamental Daily Forecast – Gold Still Moving Lock-step with U.S. Dollar

Some traders believe that gold is bullish because global investors are diversifying out of the dollar and into other currencies.
James Hyerczyk
Comex Gold
Comex Gold

A weaker U.S. Dollar is helping gold prices recover early Friday after testing a one-week low the day before. The dollar’s weakness is mostly being driven by a rebound in the Euro.

At 0919 GMT, February Comex Gold futures are trading $1336.20, up $9.00 or +0.67%. The April futures contract is trading $1341.00, also up $9.00. The market is getting ready to roll over from February to April but today, the February contract still has the highest volume and open interest. This will change shortly.

Daily February Comex Gold

Forecast

Today’s price action indicates that gold is still being driven higher by the weaker U.S. Dollar. Bearish gold traders believe the dollar is oversold and are hoping a short-covering rally begins to knock gold prices lower.

Some traders believe that gold is bullish because global investors are diversifying out of the dollar and into other currencies. Additionally, there are reports that brokers in Europe have been increasingly been asking about switching from cryptocurrencies into gold.

Gold is rebounding early Friday after hitting $1324.30, its lowest price since January 12. If the upside momentum continues and buyers take out $1345.00, we could see a continuation of the rally into the September 8 top at $1365.80.

Taking out $1324.30 will mean the selling is getting stronger. This could lead to an eventual break into a short-term retracement area at $1291.70 to $1279.10. This is a value zone. A test of this area should attract new buyers.

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