Price of Gold Fundamental Daily Forecast – Volatility in Play Today with Fed Speakers

Gold futures fell to its lowest price in nearly six weeks. Most of the weakness was attributed to a “flash crash” early in the session from which the market never recovered. Apparently, a trader sold 18,500 contracts of gold by mistake, triggering sell-stops below $1250.00. Losses, however, were limited by geopolitical concerns.

August Comex gold finished the trading session at $1246.60, down $10.00 or -0.80%.

In the U.S., durable goods fell 1.1 percent in May, more than the expected 0.5 percent forecast. Core Durable Goods Orders finished up 0.1 percent, below the 0.4 percent forecast but better than the minus 0.5 percent previous read.

Treasury yields fell after the release of the Durable Goods report, under pinning gold temporarily, however, this news wasn’t enough to attract enough buyers to erase the damage done on the charts to the “flash crash.”

Forecast

On Tuesday, the focus for gold traders will be on the direction of Treasury yields and the U.S. Dollar. These two factors are likely to be influenced by a slew of U.S. economic reports and commentary from FOMC Member Patrick Harker and Fed Chairwoman Janet Yellen. Traders will be listening for any comments on growth in the economy, inflation and the likelihood of another rate hike by the Fed before the end of the year.

The key reports on Tuesday include the S&P/CS Composite – 20 HPI, consumer confidence and the Richmond Manufacturing Index.

Following these reports, FOMC Member Harker, Fed chair Yellen and FOMC Member Kashkari will deliver speeches. If they continue with their hawkish commentary then look for the U.S. Dollar to strengthen. This would put additional pressure on gold prices.

A softer tone will likely drive down Treasury yields and the U.S. Dollar. This could make gold a more attractive investment to foreign buyers.