Price of Gold Fundamental Daily Forecast – Too Many Alternatives Limiting Gold’s Appeal as Safe-Haven Asset

Gold futures are trading higher on Thursday shortly before the regular session opening. The market is trading inside yesterday’s range which suggests investor indecision and impending volatility. Like several other financial markets, gold is trading in a range this week as investors await the fate of the U.S.-China trade deal.

Stock market investors are trimming positions and other money is moving into safe-haven assets like the Japanese Yen and Treasurys. Gold is up slightly this week, but there doesn’t seem to be much demand for the asset as a safe-haven investment.

At 11:19 GMT, June Comex gold futures are trading $1284.40, up 3.00 or +0.23%.

Despite the rising geopolitical tensions, the sell-off in the stock market has been orderly. There doesn’t seem to be panic selling or aggressive flight-to-safety demand, which is probably why gold’s gains have been limited this week.

Furthermore, there is still hope that there could be a deal between the U.S. and China. Gold graders are a little nervous ahead of the start of two-day trade talks in Washington later in the day. Instead of trying to finish a deal that was reportedly close to completion about two weeks ago, Chinese negotiators will likely be trying to convince the Trump administration to back down from its threat of increased tariffs on Chinese imports on Friday.

Shortly before the start of negotiations and the new tariffs, traders have had to sift through a war of words. This is likely the source of investor uncertainty. We’ve hit the point where traders aren’t likely to make a move until they see some action. And that’s not likely until Friday. On Wednesday, Washington accused Beijing of backtracking on commitments made during trade negotiations.

Economic News

Geopolitical issues aside, fresh economic data today could influence the price action if it has an effect on Treasury yields and the U.S. Dollar.

At 12:30 GMT, Fed Chairman Jerome Powell is scheduled to speak. Data on Producer Inflation, the Trade Balance and Weekly Unemployment Claims will also be released.

Daily Forecast

Gold changed trend on the daily chart on Wednesday, but buyers disappeared when the market hit a retracement zone at $1291.30 to $1296.80. This back and forth trade is likely to continue over the near-term because of several key resistance levels overhead.

Furthermore, if geopolitical issues continue to escalate, traders may choose the dollar, the Yen and Treasurys to hedge their risk. Low demand for gold will likely limit gains and could drive it into a rangebound trade.