Price of Gold Fundamental Daily Forecast – Initial Claims on Tap Followed by Another Treasury Auction

Gold futures are inching higher for a third session on Thursday as aggressive bottom pickers continue to claw back recent losses that drove the precious metal into its lowest level in nine months. The short-covering rally is being fueled by the more traditional fundamentals – lower Treasury yields and a weaker U.S. Dollar.

At 13:08 GMT, April gold futures are trading $1733.70, up $11.90 or +0.69%.

Although the main trend is down, the market is picking up some upside momentum. Taking out $1739.10 will change the minor trend to up with $1744.30 the next target.

Watch the price action and read the order flow on a test of $1744.30. This could be the trigger point for an acceleration to the upside.

We’re looking for a sustainable rally as long as $1711.70 holds as support.

Treasury Yields Continue to Slide

U.S. Treasury yields fell on Thursday morning after the House of Representatives passed the $1.9 trillion stimulus bill, and ahead of the U.S. weekly initial claims report.

The yield on the benchmark 10-year Treasury note dropped to 1.48% at around 13:00 GMT. The yield on the 30-year Treasury bond dipped to 2.234%.

The drop comes in response to Wednesday’s Treasury auction that eased investor concerns about a fall in demand for government debt.

Dollar Drops to One-Week Low as Inflation Fears Fade

The U.S. Dollar Index fell to its lowest in a week on Thursday and there was a mild “risk on” tone in the currency markets after U.S. Consumer Inflation data calmed inflation fears.

Softer consumer prices data in the United States on Wednesday helped to ease concerns about a possible spike in inflation when economies re-open from the COVID-19 pandemic.

Daily Forecast

Weekly jobless claims, due out at 13:30 GMT on Thursday, could trigger a mild reaction in the gold market, but unless the news is important enough to rattle Treasury bond traders, we don’t expect much of a reaction. Traders are looking for the report to show 725,000 new claims.

At 15:00 GMT, traders will get the opportunity to react to a report showing the number of job openings.

Later in the session, investors will be keeping an eye on Thursday’s auction of $24 billion of 30-year bonds, as a gauge on demand for longer duration government debt. This could drive down gold prices if the auction is not well received.

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