Price of Gold Fundamental Daily Forecast – Turns Higher as Dollar Pressured by Sterling Reversal

Based on the early price action, we’re likely to see more of the same sideways price action we’ve seen over the past week. Strong yields and rising demand for risk is likely to weigh on prices, but a weaker dollar could be supportive for dollar-denominated gold.
James Hyerczyk
Comex Gold

Gold futures are trading steady with below average volume on Monday as traders seek more clarity on Brexit and progress in U.S.-China trade relations. The market is also being supported by a weaker U.S. Dollar, but gains are being limited by higher U.S. Treasurys and increased demand for risky assets.

At 12:27 GMT, December Comex gold is trading $1494.60, up $0.50 or +0.04%. The trading range is $1497.70 to $1490.60. The market is also trading inside is October 11 price range for a sixth straight day, which suggest investor indecision and impending volatility. Translation:  Look for an expanded trading range within the next day or two. The move will likely be news driven.

Traders are paying close attention to the price action in the British Pound on Monday, which opened lower as investors dumped the Sterling on uncertainty over the outcome of the delayed vote on Brexit in the U.K. Parliament.

Despite the failure of Britain’s “super-Saturday” to live up to its billing when UK lawmakers delayed a vote on a reworked Brexit deal, there seemed to be tentative hopes that it would eventually be passed.

CNBC is reporting a lawmaker from the Northern Irish Democratic Unionist Party (DUP), whose votes could be vital to the deal passing, said it would not support a possible opposition party amendment to put the UK in a customs union with the European Union.

In other news, hedge funds and money managers cut their bullish positions in COMEX gold and silver contracts in the week to October 15, data from the Commodity Futures Trading Commission (CFTC) showed on Friday.

Daily Forecast

As far as the delayed Brexit vote over the weekend is concerned, “There was nothing massively surprising, there was always a doubt that the deal was not going to be passed…if we start to move towards a no-deal, then we can potentially see a knock on effect in terms of safe haven moves, but a possible extension for the deal reduces the chance for a no-deal Brexit,” Craig Erlam, OANDA senior market analyst, said.

Based on the early price action, we’re likely to see more of the same sideways price action we’ve seen over the past week. Strong yields and rising demand for risk is likely to weigh on prices, but a weaker dollar could be supportive for dollar-denominated gold.

Despite the limited movement, gold is likely to remain sensitive to any major developments over U.S.-China trade relations, and Brexit. At this time, there is hope for at least a partial trade agreement, but the situation remains tense as China would like to see the U.S. lift its tariffs before any major issues could be agreed upon.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.