Fundamental Forecast for Gold: Bullish

GOLD TALKING POINTS:

Gold prices snapped a six-week losing streak with the precious metal up more than 1.9% to trade at 1206 ahead of the New York close on Friday. The recovery comes amid continued strength in broader risk markets, with all three major US indices closing higher on the week. Is this a major low in gold? The technicals suggest we’ll find out rather soon.

JEROME POWELL STICKS TO THE SCRIPT AT JACKSON HOLE

Comments made by Fed Chair Jerome Powell at the annual economic symposium in Jackson Hole Wyoming offered little guidance to the path of monetary policy. The Chairman downplayed concerns that the US economy was overheating while noting that gradual interest rate hikes remain appropriate given the underlying strength. The remarks fall broadly in-line with market expectations with Fed Fund Futures still pricing a 67% chance for a fourth hike this year in December.

For gold, increasing geo-political tensions and what looks to be a prolonged trade war / tariff skirmish has kept a floor under gold over the past week. A recent bout of weakness in the US Dollar has further fueled the rebound in bullion prices with the DXY turning aggressively lower this week from key structural resistance. Heading into next week the focus is on follow through with gold testing near-term resistance into the close of the week. With price, momentum, and sentiment all coming off extremes, the burden is on the bulls to get through this level and validate that a more significant low is in price.

SPOT GOLD IG TRADER SENTIMENT