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Price of Gold Fundamental Daily Forecast – Pressured by Renewed Appetite for Risk, Dollar Strength

By:
James Hyerczyk
Published: Mar 27, 2018, 12:16 UTC

Comex gold futures are in a position to form a potentially bearish closing price reversal top on Tuesday as pressure from a  rising U.S. Dollar is weighing on demand for the precious metal.

Comex Gold

Gold prices are trading lower after reversing earlier strength. A huge rebound in the U.S. Dollar and increased appetite for risk are weighing on gold prices. Earlier in the session, gold touched its highest level since February 16 on geopolitical tensions between Russia and the West.

At 1153 GMT, June Comex Gold futures are trading $1352.60, down $8.30 or -0.61%.

Gold futures finished higher on Monday, hitting a five-week high in reaction to a weaker U.S. Dollar. Gains were likely limited by an easing of global trade tensions and rising U.S. interest rates.

Gold rallied initially but broke sharply after the United States and South Korea agreed to revise a trade pact criticized by U.S. President Donald Trump, Seoul said, with U.S. automakers winning improved market access and Korean steelmakers hit with quotas but avoiding hefty tariffs.

The market turned higher late in the session when the U.S. announced it was ousting a number of Russian diplomats.

Comex Gold
Daily June Comex Gold

Forecast

Comex gold futures are in a position to form a potentially bearish closing price reversal top on Tuesday as pressure from a  rising U.S. Dollar is weighing on demand for the precious metal.

The dollar is edging higher against a basket of major currencies after three days of weakness amid easing tensions about a global trade war. According to reports, the U.S. and China are conducting behind-the-scenes talks to avert a global trade war.

Additionally, U.S. trade relations with South Korea may come into focus as the Trump administration could announce Tuesday it has struck a revised trade agreement with that country. The U.S. has leveraged the threat of tariffs to win concessions from South Korea on exports of steel and imports of American cars, according to the New York Times.

Some traders are even saying that the talk of a trade war is being exaggerated and that the U.S. is only posturing like it had in the past to get better trade deals.

On the economic front, traders will get the opportunity to react to the latest data on the S&P/CS Composite-20 HPI. It is expected to come in at 6.1%, slightly below the previous 6.3%. The Richmond Manufacturing Index is expected to come in at 23, down from 28.

FOMC Member Bostic is also expected to speak. Yesterday, Cleveland Fed President Loretta Mester, who leans somewhat hawkish, said the central bank can speed or slow its “gradual” policy tightening if, for example, recently announced U.S. tariffs on imports lead to a trade war that hits the economy.

Mester also said the Federal Reserve should continue raising interest rates this year and next so that it can avoid an overheating that cuts short the economic expansion that is already picking up steam.

Finally, the major report today will be the Conference Board’s Consumer Confidence report. It is expected to increase slightly to 131.2, up from 130.8.

 

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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