Price of Gold Fundamental Daily Forecast – Risk On, Risk Off Will Determine Gold’s Next Move

Technical and fundamental factors contributed to gold’s lower close as investors reacted to a key resistance zone and increased demand for risky assets.

June Comex Gold settled at $1252.80, down $5.90 or -0.47%.

Technically speaking, gold is in a downtrend, however, geopolitical concerns and failing U.S. Treasury yields have helped fuel a short-covering rally since May 9. On Thursday, the market ran into fresh shorting and profit-taking inside a 50% to 61.8% zone. The key resistance levels are $1255.90 and $1265.70, respectively.

Fundamentally, investors were responding to a calmer tone in the financial markets as investors reassessed President Trump’s chances of implementing his economic agenda which includes health care reform, tax reform and increased infrastructure spending.

Gold traders said the reemergence of a CSPAN video from earlier in the month that some falsely interpreted as former FBI Director James Comey saying he was never pressured to end an FBI probe by President Trump, was blamed for the steep sell-off in the gold market and the short-covering rally by the U.S. Dollar.

 Forecast

The close in the gold market on Thursday signaled that the selling was greater than the buying at current price levels. This could lead to further selling pressure on Friday.

My charts tell me that June gold is headed into the primary downside target at $1239.70 to $1233.70. This is the next key decision area for investors.

Aggressive counter-trend traders are going to have to decide whether to try to form a potentially bullish secondary higher top. Bearish traders are going to have to decide whether to take out this zone and make $1265.00 a major top.

Fundamentally, the market is being driven by fear. If the events in Washington simmer down a little then gold will feel further downside pressure, especially if stocks mount a strong comeback rally.

If the events in Washington escalate, then look for gold to catch a bid for the next rally which could be strong enough to take out $1265.00 and surge to the upside.

Additionally, lower Treasury yields and a weaker dollar will be supportive for gold.

Over all, investors are going to have to continue to monitor the “risk on” and “risk off” situation to determine the next move in gold futures.