Price of Gold Fundamental Daily Forecast – Not Responding Much to Political Issues Ahead of Fed Meeting

Gold prices are trying to recover early Friday after early session weakness, but the market still remains in a position to post a lower close for the week. The early range is tight with support being provided by speculative buying linked to political tensions between the United Kingdom and Russia. However, gains are being limited well ahead of next week’s U.S. Federal Reserve monetary policy meeting, which is expected to produce a quarter-point rate hike.

At 0344 GMT, April Comex Gold is trading $1318.00, up $0.20 or +0.02%.

On Thursday, gold prices fell in response to a stronger U.S. Dollar. The Greenback may have been supported by another drop in weekly unemployment claims. The number of Americans signing up for benefits came in at 226K, below the 227K estimate.

Other economic data was mixed. The Empire State Manufacturing Index rose to 22.5, up from 13.1, beating the 14.9 estimate. The Philly Fed Manufacturing Index was 22.3, below the 23.1 forecast and 25.8 previous read.

Forecast

Although next week’s expected Fed rate hike is already influencing investors by keeping a lid on prices, a developing story may be providing some support. According to reports, Moscow said it would retaliate against London’s move to expel 23 Russian diplomats over a nerve toxin attack on a Russian former double agent in Britain.

In other news, stocks are on the defensive again over worries over the U.S. investigation into the Trump Organization. Investors also continue to be rattled by fears U.S. tariffs could hurt the economy and trigger a trade war.

Growing U.S. political uncertainties following the recent departure of two key government officials, former Secretary of State Rex Tillerson and top economic advisor Gary Cohn, from the Trump administration have also provided some support.

Gold traders are also eyeing a report that Trump is getting ready to oust national security advisor H.R. McMaster.

On the economic front investors will get the opportunity to react to reports on Building Permits, Housing Starts, Capacity Utilization, Industrial Production and Consumer Sentiment. Traders are likely to respond the most to Building Permits which are expected to come in at 1.32M, down from 1.38M and Consumer Sentiment which is expected to drop slightly to 99.2 from 99.7.

Once again, it looks as if gold will remain under pressure under $1318.30. However, a move over $1322.80 will indicate the return of buyers.