Price of Gold Fundamental Daily Forecast – Mixed News; Strengthens Over $1215.10, Weakens Under $1205.90

Gold futures are trading slightly lower early Thursday for a second day as investors continue to mirror similar price action in the U.S. Dollar. Volume is light this week ahead of the long U.S. holiday weekend. Additionally, major economic reports have been scare this week with the price action being driven primarily by positive developments over the NAFTA trade agreement.

At 0951 GMT, December Comex Gold is trading $1209.20, down $2.30 or -0.19%.

Despite the generally weaker U.S. Dollar this week, gold has had a tough time sustaining earlier gains due to expectations of higher U.S. interest rates.

The price action in the U.S. Dollar and the movement in U.S. Treasury yields have been sending mixed signals to gold traders since Tuesday.

Following the announcement of the new trade deal between the United States and Mexico, the U.S. Dollar weakened as long investors, seeking shelter from a potential trade dispute, sold their positions. This helped spike prices to the upside, at least temporarily. However, these gains couldn’t be sustained because U.S. Treasury yields began to firm.

Forecast

The early sideways price action on Thursday is being influenced once again by similar factors that moved gold earlier in the week – a potential new trade deal with Canada and expectations of rising interest rates. Once again, the dollar will be the center of attention and the main catalyst behind the direction of gold prices.

Diminishing safe-haven demand for the dollar now that Canada is at the trade negotiating table could help underpin prices, while expectations of another rate hike in September and possibly December should keep a lid on any rallies.

On Wednesday, data showing a higher-than-expected annualized growth in second-quarter U.S. gross domestic product solidified expectations for a rate hike next month, with a 96 percent probability, according to Fed funds futures.

Today, investors will get the opportunity to react to a slew of U.S. economic data including Core PCE Price Index, Personal Spending, Personal Income and Weekly Unemployment Claims.

Furthermore investors may also be pricing in future trade negotiations between the United States and China, now that deals appear to be in place for Mexico and Canada.

Technical factors could also play a role in gold’s direction with the possibility of a strong upside bias developing on a sustained move over $1215.10 and a strong downside bias developing on a sustained move under $1205.90.