Price of Gold Fundamental Daily Forecast – Needs to Clear $1215.10 to Continue Upside Bias; Weakens Under $1205.90

Gold futures are trading higher shortly before the regular session opening on Friday. Buyers are trying to claw back yesterday’s late session loss. Gold rallied early in the session on Thursday after the weak CPI data drove down Treasury yields, dragging down the U.S. Dollar and making dollar denominated gold a more attractive investment to foreigners.

At 0842 GMT, December Comex Gold is trading $1212.00, up $3.80 or +0.31%.

Prices retreated late in the session, leading to a lower close after President Trump tempered expectations of a quick solution to the trade conflict.

On Thursday, the U.S. government reported that U.S. consumer prices rose less than expected in August as increases in gasoline and rents were offset by declines in healthcare and apparel costs, and underlying inflation pressures also appeared to be slowing.

The Labor Department said on Thursday its Consumer Price Index (CPI) increased 0.2 percent last month after a similar gain in July. In the 12 months through August, the CPI increased 2.7 percent, slowing from July’s 2.9 percent rise.

The Core CPI had increased by 0.2 percent for three straight months. In the 12 months through August, the Core CPI increased 2.2 percent after rising 2.4 percent in July.

Treasury yields whipsawed on the news, putting pressure on the dollar. Gold spiked higher on this news.

Gold prices weakened later in the session, turning the market lower at the close after U.S. President Trump tweeted that the United States is “under no pressure to make a deal with China.”

Forecast

Gold prices continue to sit inside a retracement zone, bounded by $1205.90 and $1215.10. This zone is controlling the near-term direction of the market. In other words, look for an upside bias today on a sustained move over $1215.10, and a downside bias to develop on a sustained move under $1205.90.

Furthermore, taking out $1220.70 will signal a resumption of the uptrend. The main trend changes to down on a move through $1192.70.

Today’s major reports include Retail Sales and Core Retail Sales. They are expected to have risen 0.4% and 0.5% respectively in August.

Minor reports include Import Prices, Capacity Utilization Rate, Industrial Production, Business Inventories and Preliminary University of Michigan Consumer Sentiment.

Capacity Utilization is expected to have risen to 78.3%. Consumer Sentiment is forecast at 96.7, up from 96.2.