Price of Gold Fundamental Daily Forecast – Underpinned by Geopolitics, Weaker US Dollar, Risk Demand

Gold futures are moving higher on Thursday as traders react to a whistleblower complaint that President Donald Trump received information from U.S. officials and that the president used his office to solicit interference from a foreign country ahead of the 2020 election.

Traders showed little response to the release of the complaint, but seem to be buying gold in reaction to testimony from acting director of National Intelligence, Joseph Maguire before the House Intelligence Committee.

At 13:47 GMT, December Comex gold is trading $1517.50, up $5.30 or +0.34%.

U.S. equity markets turned lower and safe-haven Treasurys and Japanese Yen turned higher, indicating that flight-to-safety buying may be supporting gold prices early in the session. The dollar is also trading lower, making dollar-denominated gold more attractive to foreign investors.

The early weakness in gold was fueled by optimism over U.S.-China trade relations after President Trump said on Wednesday a U.S.-China trade deal could arrive sooner-than-expected. The renewed strength suggests geopolitics are likely to move to the forefront, however, which could be beneficial for gold prices.

U.S. Economic News

There were no surprises in early economic releases. Final GDP came in at 2.0% as expected. The Good Trade Balance was -72.8 Billion. Nearly unchanged with the previous reported -72.5 Billion, but better than the -73.3 Billion forecast

Preliminary Wholesale Inventories rose 0.4%, but the previous month was revised lower to 0.1%. Weekly Unemployment Claims came in at 213K, slightly above the previously reported 210K and the forecast.

Daily Forecast

The early price action suggests the direction of the market the rest of the session on Thursday is likely to be determined by trader reaction to the impeachment inquiry and the outcome of the testimony from acting direction of National Intelligence.

Gold prices are likely to firm if the evidence becomes stacked against Trump, but only if demand for risk drops and demand for safe-have assets like Treasurys and Japanese Yen rise. A weaker dollar will also underpin prices.