Price of Gold Fundamental Daily Forecast -Volatility in the Cards with Jobs, Fed, Trade Talks on the Table

Gold prices are trading lower on Friday shortly before the release of U.S. jobs data at 1230 GMT, while the U.S. Dollar hovered near its 2018 high reached earlier in the week.

At 0941, June Comex Gold futures are trading $1309.80, down $2.90 or -0.22%.

Traders are taking a keen interest in today’s U.S. jobs data, with the April report expected to continue to support solid labor market growth.

According to estimates, nonfarm payrolls likely increased by 192,000 jobs in April after rising 103,000 in March. The unemployment rate is expected to drop to 4.0% from 4.1%. Average Hourly Earnings are expected to show a rise of 0.2%, down from 0.3%.

After the initial reaction to the report, several Federal Open Market Committee members are scheduled to speak. They could move the markets if there comments touch on the timing of future rate hikes. Specifically investors want to know if the Fed will raise interest rates 2 or 3 more times in 2018.

The combination of the jobs report and the Fed speakers could create volatility today. There is also the possibility of a two-sided trade with one component of the jobs report supporting gold and another pressuring gold.

Anything in the report that points toward higher inflation will support the Fed’s case for raising interest rates. This will make the dollar a more attractive investment and at the same time drive gold prices lower.

Gold traders are also monitoring the meeting between U.S. and Chinese trade officials. On Thursday, President Trump praised his relationship with Chinese President Xi Jinping as officials from the world’s two largest economies began trade talks in Beijing, while state media said China would stand up to U.S. bullying.

The trade talks could rattle the stock market. If stocks sell off sharply then money could move into safe haven assets. This would make gold a more attractive asset.

June Comex gold is currently testing a major technical retracement zone at $1311.40 to $1296.20. Trader reaction to this zone should determine the near-term direction of the market.