Price of Gold Fundamental Daily Forecast – Traders Will Be Focusing on Average Hourly Earnings

Gold prices fell on Thursday as the U.S. Dollar rebounded from near a three-week low against the Euro after ECB President Mario Draghi signaled that any policy normalization in the Euro Zone would be very gradual. The Euro gave up all of its early gains against the dollar to finish lower after Draghi said monetary policy would remain “reactive” and that measures of underlying inflation were still subdued.

April Comex Gold futures settled at $1321.70, down $5.90 or -0.44%.

On Thursday, the European Central Bank (ECB) dropped its easing bias, fueling expectations that it will normalize monetary policy in the Euro Zone.

ECB President Mario Draghi said Thursday that the solid economic recovery in the region supported the decision to remove the so-called easing bias.

“Incoming information…confirms the strong and broad-based growth momentum in the Euro Area economy, which is projected to expand in the near-term at a somewhat faster pace than previously expected,” Draghi said.

Gold was also pressured after President Donald Trump implemented steel and aluminum import tariffs that excluded Canada and Mexico, two key U.S. trade partners. Increased demand for risky assets also weighed on gold prices.

In the U.S., Challenger Job Cuts fell 4.3%, down from the previous -2.8%. Weekly Unemployment Claims rose to 231K, higher than the 220K forecast and 210K previous read.

Forecast

Gold prices are under pressure early Friday on hopes of easing tensions between the United States and North Korea and in reaction to position-squaring ahead of the U.S. Non-Farm Payrolls report.

Late Thursday, U.S. President Trump said he was prepared to meet North Korean leader Kim Jong Un for the first U.S.-North Korea summit, marking a potentially dramatic breakthrough in nuclear tensions with Pyongyang.

Prices will continue to feel downside pressure on Friday if the events lead to a “risk-on” session. That is, investor demand for higher risk assets like stocks are likely to weigh on gold prices.

Going into the Non-Farm Payrolls report, it appears traders are building short positions in anticipation of strong jobs data that should solidify a Fed rate hike later this month and set in motion as many as three more rate hikes later this year.

Traders are looking for the headline number to show an increase of 205K and for the unemployment rate to drop to 4.0%. However, traders will be focusing on Average Hourly Earnings which are expected to rise by 0.2%. A stronger than expected number is likely to be bearish for gold prices.