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Price of Gold Fundamental Daily Forecast – Supported by Fear of Slowdown in Global Economic Growth

By:
James Hyerczyk
Published: Nov 26, 2018, 12:09 UTC

There are no major economic reports today, but investors will be keeping an eye on the U.S. Dollar. If conditions continue to improve in the stock market then the dollar is likely to weaken. This should drive up demand for dollar-denominated gold.

Gold Bars and Dollar

Gold futures are trading higher on Monday shortly before the regular session opening. The market is being supported by fears of a slowdown in global economic growth which could curtail central bank attempts to raise rates, especially the U.S. Federal Reserve. Uncertainty over trade dispute discussions between the United States and China at the G20 summit in Argentina this week-end is also underpinning prices.

At 1153 GMT, December Comex Gold futures are trading $1226.00, up $2.80 or +0.23%. We’re rolling over to the February futures contract on Wednesday.

Gold has been strengthening since the week-ending November 16. That was the week the U.S. Dollar posted a potentially bearish technical closing price reversal top. It did follow-through to the upside last week, but the move was thwarted by last week’s rally in the U.S. Dollar.

Two weeks ago gold started rallying after the release of the consumer inflation report. It was further supported by somewhat dovish comments from a couple of Fed officials, who suggested the central bank may be nearing neutrality as far as rate hikes are concerned.

Last week, gold was supported by a series of weaker-than-expected U.S. economic reports including Durable Goods, Consumer Sentiment, Manufacturing and Services PMI and Weekly Jobless Claims.

However, the gains were offset by a week-long sell-off in the U.S. stock markets which raised demand for the safe-haven dollar.

Forecast

There are no major economic reports today, but investors will be keeping an eye on the U.S. Dollar. If conditions continue to improve in the stock market then the dollar is likely to weaken. This should drive up demand for dollar-denominated gold.

Gold is likely to strengthen on a sustained move over $1227.10. The potential trigger point for an acceleration to the upside is $1230.90. The daily chart shows there is room to the upside with targets at $1239.30 and $1246.00.

A sustained move under $1221.30 will be a sign of weakness with $1215.20 the next likely downside target.

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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