Gold Fairly Steady

Gold Fairly Steady

Gold fairly steady early Wednesday after rising just 10 cents Tuesday as investors awaited details of a trade deal. Meanwhile, spot palladium retreated after reaching an all-time record high above $2,000 an ounce.

Gold has been largely rangebound since news of a U.S.-China trade accord broke late last week, reducing gold’s appeal as an investment hedge, particularly as equities and the dollar rallied. But a lack of detail about the agreement has provided a floor for the precious metal.

The two superpowers announced last week that they had reached a phase-one trade agreement, promising to end a standoff between the U.S. and China that propelled gold prices to the highest level in years earlier this year as the metal benefitted from the risk-off trade.

February gold futures settled at $1,480.60 an ounce Tuesday on Comex. The metal slipped 60 cents in the first two days of this week after advancing 1.1% last week. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.6% Tuesday, Reuters reported.

Meanwhile, Barron’s reported that institutional investors are “aggressively positioning” for gold to rally through the summer since the U.S. Federal Reserve indicated it would be pausing interest-rate hikes.

Palladium, which has gained 59% this year, advanced to $2,000.35 an ounce before retreating amid a global deficit for the metal used in autocatalysts, Bloomberg reported.

The U.S. Dollar Index advanced to a one-week high, pressuring metals prices, along with advancing equities. The Standard & Poor’s 500 closed at a new record Tuesday, albeit just one index point higher, amid positive U.S. factory and housing data.

U.S. industrial production and U.S. housing starts rose more than analysts expected in November, according to data released Tuesday. In upcoming events, the Bank of Japan and Bank of England are both scheduled to release policy decisions on Thursday and U.S. revised GDP data are due Friday.

The end of the week also brings what historically can be a volatile trading day, known as quadruple witching. Occurring once a quarter, quadruple witching refers to the expiration on the same day of stock-index futures, stock-index options, stock options and single stock futures.

Silver fell 4 cents Tuesday, with the March futures contract settling at $17.07 an ounce on Comex. It’s up 6 cents for the week. Spot platinum slipped 0.1%.


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