Price of Gold Fundamental Daily Forecast – Supported by Fears Over Global Growth

Gold futures are trading higher on Thursday after a batch of dire economic data heightened fears over global growth and the prospect of additional fiscal stimulus from the government increased demand in the precious metal. Lower U.S. Treasury yields are also helping to underpin the market, while a stronger U.S. Dollar and the easing of coronavirus restrictions by many countries limited gains.

At 12:55 GMT, June Comex gold is trading $1701.60, up $13.10 or +0.78%.

US Weekly Jobless Claims Total 3.169 Million; Seven-Week Tally Hits 33.5 Million

Unemployment rolls continued to swell in the U.S. last week, though jobless claims hit their lowest level since the economy went into lockdown in response to the coronavirus pandemic.

First-time filings for unemployment insurance hit 3.17 million last week, bringing the total to 33.5 million over the past seven weeks, the Labor Department reported Thursday. The total was slightly higher than the 3.05 million expected by economists surveyed by Dow Jones and below the previous week’s 3.846 million, which was revised up by 7,000.

Daily Forecast

The latest jobless claims numbers come a day before the Labor Department releases its nonfarm payrolls report for April. Economists surveyed by Dow Jones expect a plunge of 21.5 million, easily the worst month in U.S. history, with the unemployment rate surging to 16%.

Over the short-term, gold is likely to continue to post a choppy, two-sided trade due to the battle between those traders focusing the impact of fiscal and monetary stimulus, and other watching the coronavirus curve.

Longer-term traders are being patient with the current sideways to lower trade. Since they are bullish due to the size of the fiscal and monetary stimulus, they can afford to wait for a pullback in gold into a value area.

I’m leaning toward the downside at this time as more countries and states open their economies, but will be quick to adjust to any reports showing that the curve of the new coronavirus cases is still rising.

Don’t be surprised by a drop in trading volume throughout the day due to Friday’s major U.S. jobs report.