Price of Gold Fundamental Daily Forecast – Volatility Remains at Elevated Levels

Gold prices are surging on Wednesday after erasing earlier losses. The market is now at its high for the week and threatening to take out Thursday’s high at $1356.70. Buyers came into the gold market after a U.S. Dollar rally failed and the market turned lower for the session.

At 1222 GMT, June Comex Gold is trading $1355.60, up $6.10 or +0.45%.

A strong rally in crude oil may also be agitating gold traders as some of the focus for traders remains on the volatility in the Middle East, especially Syria.

Gold traders will also be watching the price action in the equity markets since the recent rally has driven stocks to near technically overbought levels. Any signs of a top or an impending sell-off is likely to drive some investors into the safe haven gold market. A continuation of the stock market rally could also put a lid on the gold rally.

There is no specific reason for the volatility in the gold market today. Traders seemed to be locked into the dollar/gold relationship though.

Later today, investors will get the opportunity to react to the latest Federal Reserve Beige Book at 1800 GMT. Federal Open Market Committee members Dudley and Quarles are also scheduled to speak.

Based on the early price action, all we can expect today are elevated levels of volatility.