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Price of Gold Fundamental Daily Forecast – Rising Yields, Firmer Demand for Risk Weighing on Gold Prices

By:
James Hyerczyk
Updated: Dec 20, 2019, 12:21 UTC

Rising Treasury yields are also weighing on gold prices. U.S. government debt prices were lower Friday morning, as investors awaited a fresh batch of economic data that could help determine the direction of rates and gold prices today.

Comex Gold

Gold futures are trading lower on Friday, pressured by a firmer U.S. Dollar, rising interest rates and increased demand for risky assets. The market remains rangebound, which suggests investor indecision and impending volatility.

Volume is extremely light ahead of the start of holiday season so the market may not move much today. Traders, however, will get the opportunity to react to a slew of U.S. economic reports later today.

At 11:16 GMT, February Comex gold is trading $1481.40, down $3.00 or -0.20%.

The U.S. Dollar is getting most of its support from rising Treasury yields and a weaker Euro. The greenback is also posting gains against the Japanese Yen, which suggests this could be a “risk-on” day. A stronger U.S. Dollar tends to reduce foreign demand for dollar-denominated gold.

Rising Yields Capping Gold Prices

Rising Treasury yields are also weighing on gold prices. U.S. government debt prices were lower Friday morning, as investors awaited a fresh batch of economic data that could help determine the direction of rates and gold prices today.

Early Friday, the benchmark 10-year Treasury note yield, which move inversely to price, was higher at around 1.9452%, while the yield on the 30-year Treasury bond was also higher at around 2.3757%.

Sentiment received a boost when Treasury Secretary Steven Mnuchin said Thursday that he had no doubt trade negotiators representing the U.S. and China would sign their so-called “phase one” trade deal in early January.

US Stock Futures Point to Slightly Higher Open

Increased demand for risky assets is also pressuring gold prices on Friday. Investors are shrugging off the impeachment of President Donald Trump, but celebrating the passing of a New North American trade deal.

U.S. Economic Reports

Later today, gold investors will get the opportunity to react to a slew of economic reports including Final GDP, Core PCE Price Index, Personal Spending, Personal Income and Revised University of Michigan Consumer Sentiment.

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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