Price of Gold Fundamental Daily Forecast – Low Volume has Traders Searching for Catalyst

We’re likely to see a lot of two-sided trading over the near-term with the European Central Bank set to meet on July 25, and the Fed on July 31. At this time, all we can say is be careful buying strength or selling weakness unless you have strong volume on your side.
James Hyerczyk
Comex Gold and US Dollar

Gold prices are trading slightly lower on Thursday amid profit-taking following an early session surge. Today’s earlier rally may have been fueled by some light speculative buying tied to yesterday’s strong rally. Volume and volatility have been well-below average this week, which makes any attempt to breakout in either direction suspect. In other words, without a solid shift in the fundamentals, it’s been difficult to buy strength or sell weakness.

At 09:09 GMT, August Comex gold futures are trading $1423.10, down $0.10 or -0.01%. Spot prices may have hit a multi-year high on Wednesday, but futures remained capped by a pair of tops at $1441.00 and $1442.90. For that matter, prices have also been underpinned by bottoms at $1401.30, $1387.50 and $1384.70 for nearly a month.

There is a bias to the upside because the major central banks have been cutting or are expected to cut interest rates. In the U.S. markets, traders have priced in a 100% chance of a 25-basis point rate cut at the end of the month. With Fed Chairman Jerome Powell essentially confirming this rate cut, bullish gold traders are now searching for the next catalyst to drive prices through the recent resistance levels.

The focus for gold bulls at this time is whether there will be a 50-basis point rate cut in July, and if not, what the Fed plans to do in September, October and December. At this time, there is about a 25% chance of a half-a-point rate cut when the central bank meets on July 30-31.

Recent economic data and the stock market at or near all-time highs, seem to be indicating that the Fed is going to have a hard time justifying a series of aggressive rate cuts at this time. This is helping to keep a lid on prices.

Compounding the issue over aggressive rate cuts include robust job growth in June, higher-than-expected consumer inflation and better retail sales data. On Wednesday, the Fed reported that the U.S. economy continued growing at a “modest” rate in recent weeks, with consumers continuing to spend and a “generally positive” outlook overall even in the face of disruptions caused by the U.S. trade policy.

Daily Forecast

The early price action suggests we may be in for another day of sideways trading. The market was headed in that direction on Wednesday until comments from hedge fund kingpin Ray Dalio drove prices sharply higher. His remarks about a “paradigm shift” in investing is a long-term event. However, due to the thin trading conditions on Wednesday, speculative buyers were able to take advantage of the situation, hoping to drive prices through their monthly highs.

On the data front, on Thursday, traders will get the opportunity to react to U.S. economic data from the Philadelphia Fed Manufacturing Index, Weekly Unemployment Claims and the Conference Board Leading Index.

We’re likely to see a lot of two-sided trading over the near-term with the European Central Bank set to meet on July 25, and the Fed on July 31. At this time, all we can say is be careful buying strength or selling weakness unless you have strong volume on your side.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US