Price of Gold Fundamental Daily Forecast – Weaker Dollar Biggest Influence on Gold Today

Gold prices are trading higher early Monday in a surprise move. We could be looking at position-squaring ahead of Wednesday’s U.S. consumer inflation report.

At 1000 GMT, April Comex gold is trading $1323.10, up $7.40 or +0.57%.

Despite firmer U.S. Treasury yields, the U.S. Dollar is losing ground, mostly in reaction to a stronger Euro. This is helping to make gold a more attractive investment. Gold is also trading higher despite increased demand for higher-yielding assets. Stocks are trading higher after last week’s volatile sell-off.

Forecast

If the surprise strength in gold continues then we could see a rally into $1339.80 to $1347.00 by week’s end. A trade through $1309.00 will signal a resumption of the downtrend with $1306.60 to $1291.50 the next likely target.

There are no major economic releases today. At 1900 GMT, the Federal Budget Balance will be released. It’s expected to come in at 50.2 billion.

A report on U.S. consumer prices will be released on Wednesday. This should give clearer signs on the pace of inflation and with it the frequency of the anticipated interest rate rises.

Concerns of rising inflation triggered the global equity drop last week. Higher U.S. Treasury yields and flight to safety buying drove up the U.S. Dollar, making gold a less-desirable investment. Gold traders seem to reversing this move today because they may feel the selling was overdone.