Price of Gold Fundamental Daily Forecast – Traders Cautious Ahead of Central Bank Meetings

Gold futures are trading mixed to lower early Monday despite a weaker U.S. Dollar. Speculators continue to monitor the situation between Spain and Catalonia, but the primary focus seems to be on this week’s central bank activity and President Trump’s choice for Fed Chair.

At 0634 GMT, December Comex Gold futures are trading $1271.10, down $0.70 or -0.06%.

On Friday, gold futures finished slightly better, reversing earlier losses after the Catalonian parliament’s independence declaration from Spain led investors to seek safety from political upheaval.

According to CNBC, Catalonia’s declaration was in defiance of the Madrid government, which was preparing to impose direct rule over the region.

Last Friday, Spain’s leader fired the government of the rebellious Catalonia region, dissolving the regional parliament and ordering new elections after Catalan lawmakers illegally declared an independent nation.

The direction of gold this week could be determined by whether the separatist emotion behind the independence declaration grows or fades and how aggressively the central authorities in Madrid enforce the takeover in coming days.

Gold traders are also a little cautious ahead of policy meetings of three major central banks and the naming of the next U.S. Federal Reserve Chair.

Traders are waiting for cues from the meetings of the Federal Open Market Committee (FOMC) and central banks of England and Japan.

Additionally, U.S. President Donald Trump is also expected to announce the next head of the Federal Reserve, amid speculation that Fed Governor Jerome Powell could be the favored candidate. Another candidate is Stanford University economist John Taylor. He is considered very hawkish. His appointment could support the U.S. Dollar and pressure gold.

Forecast

Based on the early trade, it looks as if gold traders are not reacting much to the situation between Spain and Catalonia. Their primary focus seems to be on the central bank meetings and the naming of the new Fed Chair.

On Monday, investors will also get the opportunity to react to reports on Core PCE Prices, Personal Spending and Personal Income. The Core PCE Price Index is expected to rise 0.1%. Personal Spending is expected to rise 0.8% and Personal Sending is expected to show a 0.4% increase.

Stronger-than-expected numbers could put pressure on gold because they will support a December Fed rate hike.

Gold is likely to remain under pressure today if the focus remains on central bank activity. Gold could rally on flight-to-safety buying if the situation between Spain and Catalonia escalates.