Comex Gold

Price of Gold Fundamental Daily Forecast – Weak Longs Liquidate on Fed Tapering Fears

Gold futures fell sharply on Thursday as better-than-expected U.S. retail sales data created the optimism needed for investors to reflate bets on an early tapering by the U.S. Federal Reserve at its September 21-22 policy meeting. The strong report was the catalyst that drove U.S. Treasury yields higher, making the U.S. Dollar a more attractive asset, while encouraging weak buyers to liquidate their holdings in dollar-denominated gold.

On Thursday, December Comex gold futures settled at $1756.70, down $38.10 or -2.12%.

Retail Sales Post Surprise Gain as Consumers Show Strength Despite Delta Fears

Retail sales posted a surprise gain in August despite fears that escalating COVID cases and supply chain issues would hold back consumers, the Census Bureau reported Thursday.

Sales increased 0.7% for the month against the Dow Jones estimate of a decline of 0.8%. Economists had expected that consumers cut back their activity as the delta variant continued its tear through the U.S. Persistent supply chain bottlenecks also were expected to hold back spending as in-demand goods were hard to find, CNBC wrote.

The numbers overall reflected a more resilient consumer, with sales up 15.1% from the same period a year ago.

Gold Sellers Find Little Respite from Labor Market Sluggishness

Gold traders were clearly focused on the robust retail sales report, showing little reaction to a disappointing read on jobless claims.

Weekly jobless claims increased to 332,000 for the week-ended September 11, according to the Labor Department. The Dow Jones estimate was for 320,000.

Initial filings increased 20,000 from a week ago after posting a fresh pandemic-era low. Still, the four-week moving average, which accounts for weekly volatility , declined to 335,750, a drop of 4,250 that brought the figure to its lowest point since March 14, 2020, at the pandemic’s onset.

Philly Fed Delivers More Good News about Economic Recovery

In a separate economic report, the Philadelphia Federal Reserve reported its manufacturing activity index rose 11 points to 30.7, representing the percentage difference between firms reporting expanding activity against those seeing contraction. That number was well ahead of the Dow Jones estimate of 18.7.

Short-Term Outlook

The focus for gold traders now turns to the Fed’s September 21-22 meeting. Given Thursday’s retail sales report and the fact that several Federal Open Market Committee (FOMC) have already expressed their favor of commencing tapering this year, gold traders will be hard-pressed to build a case for taking a long position into the policy meeting.

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.