Price of Gold Fundamental Daily Forecast – Trade Through $1329.10 Changes Trend to Down

A firmer U.S. Dollar and rising Treasury yields put pressure on gold prices on Monday. Since gold is a dollar-denominated commodity, demand for the precious metal tends to drop when the dollar rises. This is because it becomes more expensive for foreign buyers.

Additionally, gold does not pay interest so when rates rise, investors sell gold then move the proceeds into interest-bearing instruments.

April Comex Gold futures settled at $1345.10, down $12.10 or -0.89%.

On Monday, the benchmark U.S. 10-year Treasury yield reached a peak of 2.727 percent, the highest since April 2014. The rise in U.S. debt yields might stem from concerns over the possibility of eventual increases in bond issuance. Additionally, investors may also be increasing bets on an accelerating economy and inflation.

In the U.S., the Core PCE Price Index came in as expected at 0.2%. Personal Spending rose 0.4%, but this was slightly below the 0.5% estimate. Personal Spending, however, came in better than expected at 0.4%.

Forecast

Gold is down for a second session early Tuesday. The downside momentum is increasing, putting the market in a position to change the trend to down. The trigger point for a change in trend and a possible acceleration into $1306.60 is the main bottom at $1329.10.

At 0839, April Comex Gold is trading $1339.30, down $5.80 or -0.43%.

In the U.S. on Tuesday, investors will get the opportunity to react to the S&P/CS Composite-20 HPI. It is expected to come in at 6.3%, slightly below the previous 6.4%.

The Conference Board’s Consumer Confidence report is expected to come in at 123.2, slightly above the previously reported 122.1.

Late Tuesday, President Trump will deliver his first State of the Union address. I expect him to talk up the economy and the U.S. Dollar, while discussing his immigration and infrastructure spending plans. This should be bearish for gold prices.