Price of Gold Fundamental Daily Forecast – Poised to React to Three Growing Concerns

Gold prices may have turned the corner on Friday and could be setting up for an acceleration to the downside. However, having been burned several times this year, speculative buyers appear to be expressing caution at this time.

June Comex Gold futures closed at $1227.70 on Friday, up $3.50 or +0.29%. For the week, the precious metal posted a measly gain of $0.80, or +0.07%. Nonetheless, the price action was positive and constructive.

Stoking investors at this time are concerns over the abrupt firing of FBI Director James Comey by President Donald Trump, the global cyber-attack on computers on Friday, and the firing of a ballistic missile by North Korea over the week-end.

Gold was boosted on Friday after U.S. Treasury yields and the U.S. Dollar weakened, following the release of a weaker-than-expected U.S. Retail Sales report. Although the Fed is still likely to raise rates in June, the weak economic data suggests the economy may not be strong enough to handle the number of rate hikes the Fed has planned for 2017.

In Washington, the controversy over Comey may mean further delays in the implementation of Trump’s economic agenda. The inability to pass tax reform in a timely manner, for example, may mean weigh on equity markets which could send money into safe-haven assets like gold and the Japanese Yen.

The firing of a ballistic missile by North Korea, could lead to a breakdown in negotiations, which may then lead to an escalation of military activity in the region.

Finally, I don’t think we know the full-effect of the Friday’s cyber-attack yet. The computer virus may continue to spread on Monday when employees go back to work. Additionally, the perpetrators of the event may step up their efforts and continues may grow worse.

One, two or all three events may be enough to drive investors out of higher-risk assets and into protective assets like gold. This is what we’ll be watching for today.

There are no major U.S. reports. Minor reports include the Empire State Manufacturing Index, NAHB Housing Market Index and TIC Long-Term Purchases.

I think most gold investors will be watching to see how the U.S. stock markets react to the three aforementioned events before making their trading decisions.