Price of Gold Fundamental Daily Forecast – Supported by Political Turbulence

Gold futures moved higher on safe haven buying on Monday after posting its biggest weekly rise in five weeks. Political turbulence in the U.S. continued to fuel demand for gold as a safe haven asset as well as reduced expectations of aggressive Federal Reserve interest rate hikes this year.

June Comex Gold futures settled at $1261.40, up $7.80 or +0.62%.

There were no U.S. economic releases on Monday, but the U.S. Dollar continued to weaken anyway as investors continued to lose confidence in the Greenback and President Trump’s ability to run the government.

Forecast

We’re currently seeing a rush into the safe-haven gold market primarily because of the drop in U.S. Treasury yields. Gold’s gains have probably been limited lately because of the support in the stock market, but a weaker stock market combined with a weaker dollar and falling interest rates will likely send gold prices soaring over the near-term.

Last week, gold topped at $1265.00 when stocks bottomed. However, the price action this week suggests that buyers have returned to gold despite firmer equity prices. This is evidence of new buyers.

We may have seen short-covering last week, but this week so far, it looks like actual buyers are driving the price action. We’ll be watching how traders react to $1265.00 today. Taking out this level with a combination of buy stops and aggressive buying could spike prices higher over the near-term.

On the contrary, the inability to sustain a move over $1265.00 will indicate that sellers are still in control. A move back under $1255.90 will signal that sellers are still in control.

Traders should note that as of early last week, investors’ net long positions in COMEX gold, have fallen to a two-month low, according to U.S. Commodity Futures Trading Commission (CFTC) data. This isn’t necessarily bearish news, however, because it leaves room for aggressive funds to re-enter on the long side.

This is likely to occur as the government continues to pursue the truth behind allegations that President Trump tried to obstruct justice into the investigation that his campaign worked with Russia to influence the presidential election.

Not only is Trump’s economic agenda in jeopardy, but also his presidency. We’ll learn more of the truth next week when former FBI Director James Comey testifies before the Senate intelligence Committee.