Price of Gold Fundamental Daily Forecast – Mixed News Creating Uncertainty, Rangebound Trade

Gold is trading slightly higher shortly after the regular session opening on Wednesday after clawing back an earlier loss. Traders remain cautious for a fourth straight session with gains being capped by a stronger U.S. Dollar. The market is being underpinned by a drop in U.S. Treasury yields.

At 12:47 GMT, June Comex gold is trading $1732.30, up $4.80 or +0.28%.

Dollar Edges Back from Four-Month High

Lending some support for gold is a pullback from four-month highs by the U.S. Dollar. The dollar firmed following comments from U.S. Treasury Secretary Janet Yellen on Tuesday. Yellen told lawmakers that future tax hikes will be needed to pay for infrastructure projects and other public investments, while Federal Reserve Chairman Jerome Powell reassured that inflation would not spiral out of control.

The dollar began to give back its earlier gains as better-than-expected purchasing manager surveys from Britain and Europe offset concerns over a third COVID-19 wave in Europe, potential U.S. tax hikes and rising tensions between the West and China.

Euro Zone business activity unexpectedly grew this month, a preliminary survey showed, but with much of Europe suffering a third wave of coronavirus infections and renewed lockdown measures, that may not last through April.

Factories ramped up output at the fastest monthly pace in over 23 years, countering a continuing slowdown in the dominant services industry, which is more vulnerable to lockdowns and the region’s slow vaccine rollout.

Treasury Yields Steady as Traders Await Powell’s Congressional Testimony

U.S. Treasury yields continued to ease from recent highs early on Wednesday, with Federal Reserve Chairman Jerome Powell set to make a second appearance in Congress later in the day.

On Tuesday, Powell and Treasury Secretary Janet Yellen told the U.S. House Committee on Financial Services that while acknowledging the richly valued asset prices in the markets, they are not concerned about financial stability.

Short-Term Outlook

Powell and Yellen will speak about the economic response to the coronavirus in front of the U.S. Senate’s Committee on Banking, Housing, and Urban Affairs, at 14:00 GMT on Wednesday.