Price of Gold Fundamental Daily Forecast – Technical Momentum, Increased Professional Buying Supporting Gold

Gold is trading near its highest level since October 16. The market could accelerate to the upside if buyers take out $1312.70. The next two targets are a major technical level at $1317.10 and the September 26 main top at $1321.00.

At 0756 GMT, February Comex Gold futures are trading $1311.00, up $1.70 or +0.13%.

Besides the technical momentum that is driving prices higher and drawing the attention of the hedge funds, gold is also benefitting from a weaker U.S. Dollar.

Gold started this current rally on the day the Fed raised rates in December and announced its 2018 interest rate forecast. The market even rallied after the Republicans passed the largest tax overhaul in 30 years.

The reaction to both of these events may be signaling that investors don’t believe they will have much of an impact on U.S. economic growth in 2018.

Gold is also being supported by tensions over North Korea, the Russian scandal surrounding U.S. President Donald Trump’s election campaign, and persistently lower inflation.

In other news, hedge funds and money managers raised their net long position in COMEX gold for the second straight week in the week to December 26, U.S. Commodity Futures Trading Commission data showed on Friday.

Gold is primarily reacting to the weaker U.S. Dollar. The dollar is trading lower against a basket of currencies early Tuesday. The current price is 91.795. The daily chart indicates the index has room to the downside with the next two targets coming in at 91.00 and 90.68. If we do see a move to these levels, gold could spike up to $1365.80 over the near-term.

A drop in demand for higher risk assets like stocks could also provide support for gold prices.