Comex Gold

Price of Gold Fundamental Daily Forecast – Traders Taking Cues from Dollar, Demand for Risk

Gold futures are inching higher on Wednesday, helped by lower demand for the safe-haven U.S. Dollar. The market is also being boosted by higher equity prices, which are responding to firmer crude oil prices. Got it? All the markets are intertwined at this time as investors continue to search for ways to lay-off risk.

At 0910 GMT, December Comex Gold is trading $1225.20, up $4.00 or +0.33%.

The catalyst behind yesterday’s whip-saw market that first drove gold to its highest level since November 7 then lower for the session was a steep sell-off in U.S. equity markets. The Dow Jones Industrial Average and S&P 500 Index fell sharply and turned negative for the year as earnings miss by Target pressured retailer shares, while the so-called “FAANG” stocks continued to weigh on the technology sector.

Gold was also hit by a plunge in commodities, led by a resumption of the selling in crude oil. West Texas Intermediate futures dropped more than 6 percent on Tuesday amid worries about rising supply across the globe and hedge fund margin call selling.

Rapidly falling stocks and commodities sent investors into the safety of U.S. Treasury markets and the U.S. Dollar. The sharp rise in the U.S. Dollar hurt foreign demand for dollar-denominated gold.

Forecast

The direction of the gold market today will once again be determined by the movement in the U.S. Dollar and investor demand for risk. Gold will continue to tumble if the dollar strengthens and stocks fall. Gold will post a recovery rally if stocks rebound and demand for the safe-haven dollar drops.

In the U.S., investors will get the opportunity to react to reports on Durable Goods, Weekly Unemployment Claims, Revised Consumer Sentiment, the Conference Board’s Leading Index and Existing Home Sales.

The major report is on durable goods. Core Durable Goods Orders are expected to rise 0.4%. Durable Goods Orders are expected to fall by 2.2%. Weekly Unemployment Claims are expected to come in steady at 215K.

Revised University of Michigan Consumer Sentiment is also expected to remain steady at 98.4. Existing Home Sales are expected to come in at 5.20 million units.

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.