Price of Gold Fundamental Daily Forecast – Tight Trading Range Suggests Investor Indecision

Gold futures are trading higher on Friday shortly before the regular session opening. The market is trading inside yesterday’s trading range, suggesting investor indecision and impending volatility. The market is likely being supported by a dip in U.S. Treasury yields. However, helping to limit gains is a rebound rally by the U.S. Dollar.

At 11:37 GMT, December Comex gold futures are trading $1472.30, up $8.70 or +0.59%.

Traders are saying that doubts over the prospects of an interim trade deal being struck between the United States and China this year, is driving most of the buying interest.

“The market doesn’t have faith in a trade deal, and it doesn’t think the second round of talks will be very successful, as the decisions from the first (round of talks) are yet to be implemented,” said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.

Treasury Yields Tick Lower

U.S. Treasury yields are drifting lower on Friday, helping to underpin gold prices. Traders are primarily reacting to global trade developments, as doubts prevailed over an interim trade agreement between the United States and China.

On the minds of traders is whether U.S. officials have accepted an invitation from China to hold a fresh round of face-to-face negotiations. And whether the U.S. legislation supporting pro-democracy protesters in Hong Kong will threaten to derail trade discussions between the two economic powerhouses.

US Dollar Firms

The U.S. Dollar is firming against a basket of currencies on Friday with most of the price action being driven by a plunge in the Euro. The uncertainty over the trade deal is driving down demand for the trade-weighted Euro. The stronger U.S. Dollar is weighing on demand for dollar-denominated gold, helping to keep a lid on prices.

Daily Forecast

Later today, investors will get the opportunity to react to the latest data on manufacturing PMI and services PMI for November. A report on consumer sentiment for November and the latest Kansas City Fed Survey will follow slightly late in the session.

Investors are also likely to closely monitor comments from Federal Reserve Bank of New York President John Williams on Friday morning.

Volatility is extremely low in all markets so be careful buying strength or selling weakness. Gold is likely to be primarily influenced by the movement in Treasury yields and demand for risky assets like stocks.