Price of Gold Fundamental Daily Forecast – Traders Not Expecting Any Major News from Yellen, Draghi

Gold prices eased on Thursday, weakened by the firmer U.S. Dollar as investors awaited clues on further interest rate hikes from Fed Chair Janet Yellen and the possibility of a reduction of stimulus from ECB President Mario Draghi at the central bankers’ conference in Jackson Hole, Wyoming on Friday.

December Comex Gold futures settled at $1292.00, down $2.70 or -0.21%.

Helping to support the market were political and geopolitical risks. Investors are still digesting the threat by U.S. President Trump to shut down the government unless he got funding for a border wall with Mexico.

In other news, top consumer China’s net gold imports via main conduit Hong Kong increased 2.3 percent in July from the previous month, data showed on Thursday.

It was another light day as far as reports were concerned. U.S. Weekly Unemployment Claims came in at 234K, slightly below the 237K estimate, and a little higher than last week’s figure.

Existing Home Sales unexpectedly fell in July to their lowest monthly level of the year due to a lack of properties for sale, which also continued to push up prices. This news was bearish for the U.S. Dollar which essentially underpinned gold prices. Lower demand for risk also provided some support for gold as U.S. equity markets weakened.

Forecast

Early Friday, gold is trading unchanged. Gold is likely to remain in a range and volume below average ahead of Yellen’s and Draghi’s speeches at 1600 GMT and 1900 GMT respectively. However, at 1230 GMT, traders will get a chance to respond to the latest U.S. Durable Goods report. Core Durable Goods Orders are expected to come in at 0.4%. Durable Goods Orders are forecast to decline 6.0%.

Better-than-expected Durable Goods Orders could underpin U.S. Treasury yields and the U.S. Dollar, while capping gold prices.

At Jackson Hole on Friday, most investors don’t anticipate any major statements on increasing interest rates from Yellen or Draghi. Speaking late in the session on Friday leaves very little time for investors to react to anything the two central bankers say. Because of the thin trading conditions, any moves are likely to be exaggerated also. We may not see any real reaction to the speeches until early next week.

Going into the speeches, market expectations for a rate hike in December are just 37.6 percent, according to the CME Group’s FedWatch tool. This is actually bullish for gold prices.

Unless Yellen or Draghi say something important pertaining to policy, I don’t expect much of a reaction in the gold or Forex markets. We could, however, have some wild swings because of thin trading conditions. Volume is expected to remain light until after the September 4^th, U.S. Labor Day holiday. Try not to get whip-sawed.