Price of Gold Fundamental Daily Forecast – Lower Despite Flat Treasury Yields, U.S. Dollar

Gold futures are edging lower on Monday shortly after the regular session opening. The market is also trading inside Friday’s range as well as inside its March 18 range for the seventh straight session. The chart pattern suggests investor indecision and impending volatility.

At 12:40 GMT, June Comex gold is trading $1725.10, down $9.60 or -0.55%.

There aren’t any major economic events today with traders still looking for guidance from U.S. Treasury yields and the U.S. Dollar.

Investors are also awaiting updates from President Joe Biden about his infrastructure plan which could cost north of $3 trillion. The president is expected to unveil his plan when he travels to Pittsburgh on Wednesday.

White House press secretary Jen Psaki said Sunday Biden plans to roll out two packages in the coming months, the first covering infrastructure and the second covering health and family care.

“The market isn’t placing very high odds on this infrastructure/tax blueprint coming to fruition and while Biden probably won’t get everything he’s asking for, Congressional Democrats and the White House are very intent on passing some substantial bills in the coming months,” Adam Crisafulli, founder of Vital Knowledge, said in a note.

The big issue for gold traders down the road is, how is the U.S. going to pay for the stimulus, the infrastructure deal and the healthcare plan?

The stock and futures markets are close for the Good Friday holiday, but the March jobs report is still slated for release that morning. Economists expect 630,000 jobs were added in March, and the unemployment rate fell to 6% from 6.2%, according to Dow Jones.

Treasury Yields Flat to Start the Week

U.S. Treasury yields were flat on Monday, with the 10-year yield hovering above 1.65%.

Treasury yields have been rising rapidly recently over concerns about possible inflation growth amid the economic recovery from the coronavirus pandemic. This has been putting pressure on gold prices. However, data out Friday for the personal consumption expenditure price index, showed muted price inflation in February.

Concerns around inflationary pressures should continue to be the theme driving the price action in bonds, the U.S. Dollar and gold.

The Fed says it expects inflation to rise, but said this “transitory rise” would not be enough for the Fed to adjust its policy. Nonetheless, investors have been dumping bonds in anticipation of a surge in inflation. This has been driving yields higher and gold lower.

Some are saying that the bond market is testing the resolve of the Federal Reserve, Ben Jones, senior strategist at State Street Global Advisors, told CNBC’s “Squawk Box Europe” on Monday, “I personally wouldn’t be betting against the Fed,” Jones said, agreeing that while there would be higher levels of inflation over the summer as economies re-open, it would “start to drift a little bit lower over the back end of this year.