Price of Gold Fundamental Daily Forecast – US Economic Reports: Low Volume Could Produce Exaggerated Reactions

Gold futures are trading lower on Wednesday on below average volume ahead of Thursday’s U.S. bank holiday. The selling pressure is coming from increasing demand for higher risk assets, fueled by optimism over a U.S.-China trade deal. Treasury yields are also rising, making the U.S. Dollar a more attractive asset and driving down demand for dollar-denominated gold.

At 13:08 GMT, February Comex gold is trading $1463.80, down $3.60 or -0.25%.

Trade Deal Update

Comments on the status of the U.S.-China trade talks have been scarce this week, making investors a little nervous, but not like last week when worries drove investors out of the risky assets and into the safe-havens for safety.

On the positive side, negotiators from Washington and Beijing held another phone call on Tuesday morning to discuss how to “resolve core issues,” China’s Ministry of Commerce said.

China’s Ministry of Commerce said in an online statement, “Both sides discussed resolving core issues of common concern, reached consensus on how to resolve related problems (and) agreed to stay in contact over remaining issues for a phase one agreement,” the Chinese-language statement said, according to a CNBC translation.

On Tuesday, Trump said the United States was in the “final throes” in its attempt to reach a trade deal with China, but that at the same time Washington stands with protesters in Hong Kong, where it wants to see democracy.

President Donald Trump on Friday said on the television program “Fox and Friends” that a long-negotiated trade deal with China is “potentially very close.”

There are pessimists out there which may be why gold hasn’t been plunging. These investors have doubts that the economic powerhouses are even close to a deal. They feel gold is being capped by Trump’s comments, which have been positive, while offering nothing concrete.

U.S. Economic Reports

Today, gold investors will have the opportunity to react to a slew of U.S. reports. Due to the thin pre-holiday trading conditions, we could see exaggerated reactions to these reports.

The major report is Chicago PMI. It is expected to come in at 47.2, up from 43.2

The next key reports are Durable Goods, Preliminary GDP, Core PCE Price Index and Personal Spending.

Minor reports include Weekly Unemployment Claims, Pending Home Sales and Personal Income. The Fed will also release it Beige Book at 19:00 GMT. Will anyone be around to trade this report?