Price of Gold Fundamental Daily Forecast – Not Likely to Move Much Unless Fed Speakers Surprise

Gold futures are trading relatively flat on Friday, but still in a position to post its second consecutive weekly higher close. Traders are trying to build a support base after yesterday’s steep decline wiped out nearly all of this week’s earlier gains. Investors are conflicted with prices being supported by the slowing global economy and expectations the U.S. Federal Reserve will take a pause in its plan to raise rates. However, increasing demand for risky assets, due to the hope that the U.S.-China trade dispute will end soon, is helping to cap gains.

At 13:18 GMT, April Comex gold is trading $1328.10, up $0.30 or +0.02%.

On Thursday, the market plunged after a steep rise in U.S. Treasury yields, however, the selling may have been limited by weaker-than-expected U.S. economic reports.

Earlier in the week, the Fed’s Monetary Policy Meeting Minutes indicated a slightly less dovish than expected picture on the future of interest rates, weighing on gold over the last two session. Yesterday’s rise in Treasury yields even indicated investors may be looking for at least one Fed interest rate hike in 2019.

However, weak data on U.S. Durable Goods, manufacturing and existing home sales revived some market expectations that the Fed would stop its tightening cycle this year. Traders are also saying that jitters over a weakening economy in China and Europe may be bolstering demand for gold.

Daily Forecast

Today, the focus will be on Federal Open Market Committee member remarks. Traders don’t expect members, Williams, Clarida, Bullard and Quarles to waiver too much from the Fed’s decision to remain “patient” when making interest rate decisions.

Furthermore, we could also find out more information on what the Fed plans to do with its balance sheet. The market expects the Fed to stop reducing its balance sheet, which is viewed as de facto tightening. Halting the practice could weaken the dollar.

On Thursday, St. Louis Fed President James Bullard told CNBC he thinks interest rate hikes and the reduction of bond holdings is near an end. He also said he expects a timetable to be finalized in “the next couple of months.” He also added that interest rates now are “a little too high.”

Dovish comments from the FOMC members are likely to underpin gold prices. However, traders should also continue to monitor the price action in the U.S. Dollar, Treasurys and equity indexes.