Gold Hanging Tough

Market Gage Gold Market Insights

Gold hanging tough this morning, recovering some of the turf it lost late yesterday as uncertainty over the U.S.-China trade standoff and the Brexit timetable diminished, causing equities to rally and reducing the yellow metal’s attractiveness as an investment hedge.

Gold prices got a little support from this morning’s U.S. retail sales figures. The start to the Holiday shopping season missed its mark, rising only 0.2% in November, missing economists expectations of a 0.5% increase.

U.S. President Donald Trump has agreed to a phase-one trade deal with China, averting the implementation Sunday of a new round of tariffs, Bloomberg reported, citing unidentified people familiar with the matter. While the terms have been agreed upon, the final text isn’t yet done, the people said.

The broader market also advanced as U.K. Prime Minister Boris Johnson’s Conservative Party won a decisive majority in Parliament in Thursday’s election, a development that’s likely to accelerate the country’s exit from the European Union to as soon as January. The pound surged.

But the U.S. House Judiciary Committee is scheduled to vote at 10 a.m. Washington time on Friday on articles of impeachment against President Donald Trump, adding a layer of uncertainty and providing metals prices with a floor.

February gold futures slipped 0.2% Thursday to settle at $1,472.30 an ounce on Comex, though it was up 0.5% in the first four days of the week. The Standard & Poor’s 500 Index and Nasdaq Composite Index closed at records Thursday, while the Dow Jones Industrial Average reached an intraday record. The February contract is currently at $1,477.50.

Silver gained 0.6% Thursday, with the March futures contract settling at $16.95 an ounce on Comex. Futures advanced 2.1% in the first four days of the week and were heading for their best week since late October.

Spot platinum jumped 0.5% Thursday and was up 5.4% in the first four days of the week, while spot palladium increased 1.5% Thursday and touched a record. It’s up 3.2% in the first four days of the week. Mines in South Africa have been plagued by the largest power blackouts in more than a decade, forcing some production cuts.

In economic news, U.S. initial jobless claims rose to the highest level in more than two years last week, data showed Thursday, though the numbers tend to be volatile in the week around the U.S. Thanksgiving holiday. U.S. monthly GDP numbers are due out Friday.

On Wednesday, the Federal Reserve left interest rates unchanged for the first time in four policy meetings. In its summary of economic projections, it said that it sees 2% GDP growth next year, 3.5% unemployment and a 1.9% core PCE rate.

The European Central Bank on Thursday also held rates steady. It forecast annual real GDP growth for the euro area of 1.2% in 2019, 1.1% in 2020 and 1.4% in 2021 and 2022, an upward revision of 0.1% for 2019 and a downward revision of 0.1% for 2020.


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