Price of Gold Fundamental Daily Forecast – Dollar Up, Gold Down as Debate Offers No Clarity
Gold futures were under pressure on Wednesday and was on track for its biggest monthly decline in nearly four years, as the U.S. Dollar benefitted from caution that crept into the financial markets after the first U.S. presidential debate.
The tepid response to the debate suggests the outcome was a non-event and that traders just reverted back to the U.S. Dollar for direction.
At 11:16 GMT, December Comex gold futures are trading $1890.50, down $12.70 or -0.67%. Despite the poor monthly performance, for the quarter, bullion is on track for its eighth straight gain.
After the completion of the chaotic first U.S. presidential debate, investors turned cautious and sought protection in the U.S. Dollar. This reduced dollar-denominated gold’s appeal as an investment to foreign investors.
Daily Forecast
U.S. reports will move to the forefront on Wednesday with investors getting the opportunity to react to figures on Housing Starts, Final GDP, Chicago PMI and Pending Home Sales. Look for a volatile reaction to the ADP Non-Farm Employment Change report. It is expected to come in at 650K, better than last month’s 428K, a sign of improving private sector hirings.
Traders are still monitoring the progress between the Democrats and Republicans over the next stimulus package. However, the price action suggests traders are putting little faith in having a deal completed before the November 3 elections.
. Weak economic data could drive the stock market lower, which would make the U.S. Dollar an attractive safe-haven investment. A rising dollar would put pressure on gold prices.
Technically, traders are trying to establish a support base inside $1889.70 to $1842.60. It’s possible that this could lead to a sideways trade until investors get more clarity about the U.S. presidential election.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
