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James Hyerczyk
Comex Gold

Gold futures are inching higher on Thursday shortly before the regular session opening at 13:00 GMT. The market is currently trading inside Tuesday’s wide range, which suggests investor indecision and impending volatility.

On the last day of 2019, gold prices hit their highest level since October 3. Technical factors could also be contributing to today’s slow trade. The market is currently trading inside a 50% to 61.8% retracement zone of its September to November price range. Trader reaction to this zone could determine if the market challenges last year high or retests the lows from the fall over the near-term.

Gains are likely being limited on Thursday due to the stronger U.S. Dollar.

At 11:50 GMT, February Comex gold is trading $1524.70, up $1.60 or +0.11%.

U.S. Dollar Influence

The U.S. Dollar has been under pressure against a basket of currencies since the U.S. and China announced Phase One of a trade deal on December 13. Dollar investors are dumping the greenback bought as safe-haven protection against an escalation of the trade war. The weaker U.S. Dollar is helping to drive up demand for dollar-denominated gold.

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China Eases Monetary Policy

Easy monetary policy tends to have a bullish effect on gold. China’s central bank on Wednesday said it was cutting the amount of cash that all banks must hold as reserves, releasing funds to shore up the slowing economy.

Daily Forecast

On Thursday, investors will get the opportunity to react to the latest U.S. reports on Challenger Jobs Cuts, Weekly Unemployment Claims and Final Manufacturing PMI.

Weekly Unemployment Claims are expected to come in at 222K, matching last week’s number. Final Manufacturing PMI is expected to come in at 52.5. It posted a similar number last week.

Friday could be a market moving day with the release of the ISM Manufacturing PMI report. It is expected to come in at 49.0, slightly better than the previously reported 48.1. A number below 50 means contraction.

The Federal Reserve will also release its December meeting minutes. Traders are hoping the minutes reveal whether the Fed will cut rates in March. Not because the economy needs it, but rather as insurance against an unexpected downturn.

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