Price of Gold Fundamental Daily Forecast – Upside Momentum Could Slow if Yields, Dollar Rebound

Gold futures are inching lower early Tuesday after posting a slight gain the previous session. The upside momentum is a little tentative due to a small rebound in the U.S. Dollar and Treasury yields.

Despite the early setback, the market remains underpinned by the prospect that the U.S. economy may actually be slowing down and that interest rates will remain at historically low levels for the foreseeable future. Traders may have come to this conclusion based on the April’s weaker-than-expected jobs data released on Friday.

At 03:55 GMT, June Comex gold is trading $1835.20, down 2.40 or -0.13%.

Two schools of thought may have developed following the release of the jobs data on Friday. Both could have a major impact on the direction of gold prices over the near-term. One believes the economy could slow due to labor and raw material shortages. The other believes the jobs report was off because of those shortages, and that the employment numbers could improve dramatically next month when the May jobs report is released.

The first school of thought also pushes the possibility of a Fed tightening well into the future, which means gold could be underpinned for a while. The second school of thought isn’t bearish per se, but it could slow the pace of the rally or even trigger a prolonged sideways trade.

As long as June Comex gold can hold above $1788.50 then the bias should be the upside. Breaking under $1788.50 but holding $1711.90 will likely lead to a sideways trade.

Fed’s Evans:  April’s slow job creation likely a “one month thing” – CNBC

April’s unexpectedly small increase of 266,000 payroll jobs is likely a “one month thing” associated with the complexities of reopening the economy after the coronavirus pandemic, Chicago Federal Reserve President Charles Evans said Monday.

“Hopefully it is a one month kind of thing…I certainly think so. I am looking for continued strong employment growth the rest of the year,” Evans said on CNBC. While enhanced unemployment benefits may slow hiring by giving workers more time to hunt for their next job, he said he felt child care, school closures and other issues are likely playing a greater role.

For a look at all of today’s economic events, check out our economic calendar.