Comex Gold

Price of Gold Fundamental Daily Forecast – Could Spike Higher if Fed Changes Approach to Inflation

Gold futures are edging lower early Wednesday despite weaker Treasury yields and a slightly weaker U.S. Dollar, ahead of the release of the minutes from the July Federal Reserve monetary policy meeting that could set the tone later in the session.

At 06:14 GMT, December Comex gold is trading $1997.40, down $15.70 or -0.78%.

Currently, gold is straddling a key technical area at $1981.70 to $2007.10 that could determine the near-term direction of the market.

U.S. Treasury Yields

U.S. Treasury yields were lower Wednesday morning as investors awaited the release of the latest Federal Reserve minutes, while monitoring developments on a new coronavirus relief bill in Washington.

Stimulus Package

U.S. Treasury Secretary Steven Mnuchin on Tuesday criticized Democratic counterparts for what he characterized as unwillingness to discuss a smaller coronavirus stimulus agreement. However, Politico reported that House Speaker Nancy Pelosi has voiced the possibility of cutting some demands to secure a deal.

US-China Tensions

President Donald Trump said on Tuesday that he had canceled further impending trade talks with Beijing over its response to the coronavirus pandemic, which has now infected more than 5.4 million Americans.

Daily Forecast

The direction of gold prices today will continue to be determined by U.S. Treasury yields and the U.S. Dollar. Both are likely to be influenced today by the message delivered by the Fed in the minutes from its July monetary policy meeting.

The FOMC’s last meeting minutes will be released at 18:00 GMT, offering an insight into the central bank’s deliberating process as it looks to shore up the economy in the wake of the pandemic.

Most analysts agree the Fed is not expected to indicate any new monetary stimulus initiatives in the minutes, however, investors will be watching for any change to the Fed’s approach to inflation that could be negative for the dollar. This could spike dollar-denominated gold higher.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.