Gold holding above $1,450 despite stumbling on strong economic data released this morning. Three new pre-holiday reports show positive signs including a drop of 15,000 in U.S. weekly jobless claims, better-than-expected growth in the U.S. third quarter GDP (up an annual rate of 2.1% versus the forecast 1.9%), and the U.S. Commerce Department report showed an increase of .6% in U.S. durable-goods orders for October, that’s up from September’s revised 1.4% drop.
Gold was little changed yesterday after U.S. President Donald Trump said the country was close to a trade deal with China. But the yellow metal held onto a floor as bills passed by the U.S. Congress to support Hong Kong protesters were expected to complicate an agreement.
“We’re in the final throes of a very important deal,” Trump told reporters Tuesday at the White House. “It’s going very well, but at the same time, we want to see it go well in Hong Kong. I think it will.”
Pro-democracy candidates won a landslide in local elections Sunday after months of social unrest. The win was seen as a rebuke to the Beijing-backed chief executive Carrie Lam and her administration.
February gold futures edged 0.3% higher to settle at $1,467.40 an ounce Tuesday on Comex. Bullion is still down 3.1% so far this month. Trading is anticipated to be light going into the U.S. Thanksgiving holiday.
Spot gold, which was trading around $1,460 an ounce early Wednesday, may retest support at $1,455, and a break below that could trigger a fall into the $1,417-$1,440 range, according to Reuters analyst Wang Tao.
Gold prices skyrocketed earlier this year as a hedge against uncertainty as the U.S.-China trade standoff worsened. Equities rose to a new record Tuesday on signs a China deal may be close, and the dollar rallied, making gold less attractive as an alternative investment.
In economic news, China’s industrial profits fell the most in eight months in October amid sluggish demand and as the economy struggles with the U.S. trade war. Industrial profits fell 9.9% year on year to 427.6 billion yuan, compared with a 5.3% decline in September, according to data released Wednesday by the National Bureau of Statistics.
U.S. consumer spending, GDP, jobless claims and durable goods data are due out later Wednesday. U.S. financial markets are closed Thursday for the Thanksgiving Day holiday. China’s manufacturing PMI data comes out Friday.
Investors continue to keep a close eye on economic news for indications on future Federal Reserve actions after the central bank cut rates for three consecutive times. The CME FedWatch Tool showed a 94.8% probability that the Federal Open Market Committee would keep rates unchanged at the next meeting Dec. 11, while there were 5.2% odds on a hike.
Silver rose 0.9% Tuesday but is still down 4.9% so far this month. The March contract settled at $17.19 an ounce Tuesday on Comex. Spot platinum and spot palladium both increased Tuesday.
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