Price of Gold Fundamental Weekly Forecast – Central Banker Comments at Jackson Hole Could Set the Tone
Let’s cut to the case instead of analyzing every event that took place last week that drove the price action in the gold market. Gold is following the U.S. Treasury yields. Period. If Treasury yields fall, gold goes up and if Treasury yields rise, gold goes down.
December Comex Gold closed last week at $1291.60, down $2.40 or -0.19%.
When there’s political turmoil in Washington and any major geopolitical concern that drives global investors into U.S. Treasury instruments then yields will fall because they are inversely related. When yields fall, the U.S. Dollar weakens and gold becomes a more attractive investment.
When there is relative calm in Washington and around the world, the direction of Treasury yields tend to be determined by economic data and Fed activity.
When stocks plunge on profit-taking, investors have to park the proceeds somewhere so they usually choose gold, Treasurys and the Japanese Yen.
These are several of the factors that drove gold prices in both directions last week.
Forecast
Technical, fundamental and news factors are influencing gold prices at this time.
Technically, the year-long range is $1396.00 to $1139.70. Its retracement zone is $1267.90 to $1298.10. A sustained over this zone will be bullish. A sustained move under this zone will be bearish. On the upside, the trigger-point for an acceleration in prices is $1307.00. However, in order to sustain any rally, there is going to have to be bullish news supporting the buying. A plunge in interest rates, or stock prices will do the trick also.
This week is a light economic report week with U.S. Durable Goods due on Friday. The big event is going to be the central bankers’ Jackson Hole Symposium.
The price action this week is likely to be dictated by what the central bankers’ say at Jackson Hole. Anything hawkish will pressure gold. Dovish comments should be supportive.
The wildcards are President Trump and North Korea.
This article was originally posted on FX Empire