Price of Gold Fundamental Daily Forecast – Safe-haven Buying Boosting Gold Prices

Gold futures had a volatile session on Tuesday, changing direction several times before closing only slightly lower. A weaker dollar drove gold prices higher early in the session. Gold fell sharply, taking out last week’s low after the release of a better-than-expected job openings report.

Gold then rallied from its lows into the close on geopolitical risk buying due to the North Korean nuclear weapon news and Trump’s threatening response.

December Comex Gold futures settled at $1262.60, down $2.10 or -0.17%.

To recap the news, after an early rally, gold prices fell after data showed U.S. job openings surged to a record high in June. According to the Labor Department, job openings, a measure of labor demand, increased 461,000 to a seasonally adjusted 6.2 million, the highest level since the series started in December 2000.

Gold rallied late after it was revealed by the Washington Post that Pyongyang had successfully created a miniaturized nuclear weapon designed to fit inside its missiles. The market rose further after President Donald Trump issued a warning to North Korea, saying that its threats will be “met with fire and fury.”

Forecast

Comex gold is trading higher early Wednesday amid rising tensions between the United States and North Korea. The market was underpinned on the opening by Trump’s comments from Tuesday. The rally was extended by new buyers who drove the market higher after reports surfaced saying North Korean had threatened to strike the U.S. Pacific territory of Guam.

Gold is likely to continue to rally if U.S. Treasury yields continue to fall as well as the U.S. Dollar and U.S. stocks. This would likely occur if investors decide to pull their money out of risky assets and seek shelter in lower-yielding assets.

In economic news, traders will get the opportunity to react to the latest data on Preliminary Nonfarm Productivity, Preliminary Unit Labor Costs and Final Wholesale Inventories.

Given the tensions between North Korea and the U.S., I don’t think investors will react at all to the reports. Remember that money leaving the risky stock market has to go somewhere. The most logical places to put the cash are the Japanese Yen, U.S. Treasurys and gold.

At this time, gold is seeing a normal reaction to the news. Taking out last week’s high at $1280.30, however, could fuel an acceleration into $1305.50