Price of Gold Fundamental Daily Forecast – Weaker Dollar Encouraging Short-Covering and Profit-Taking

Gold is trading nearly unchanged as we approach the regular session opening. The market is trading inside yesterday’s range which indicates investor indecision and impending volatility. It’s also clawing back an early loss which suggests speculators and profit-takers may be betting on a further decline in the U.S. Dollar.

At 0946 GMT, August Comex gold is trading $1224.50, up $0.50 or +0.04%.

After hitting a more than one year low earlier in the week, gold rebounded on Thursday after the U.S. Dollar broke from its one year high following comments from President Trump on the Fed’s monetary policy.

Trump criticized Fed policy even though most economists believe the highest inflation in seven years and the lowest unemployment in 40 years justify recent interest rate hikes and a strong U.S. Dollar.

Earlier in the week, Fed Chairman Jerome Powell drove Treasury yields and the U.S. Dollar higher after his two-day congressional testimony reiterated his call for years more of steady growth and reaffirmed expectations for more interest rate hikes.

There are no major economic reports on Friday, but gold investors will be focusing on the Dollar/gold relationship. Any weakness in the dollar will be supportive for gold prices.