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Gold Pares Big Gains, Still Poised for Weekly Jump

October 25, 2019 at 16:56 by Andrew Moran

Gold futures are paring their gains from earlier in the Friday trading session, but they are still poised for their best week this month. Investors were bullish on the yellow metal to close out the trading week on US-China trade uncertainty, Federal Reserve policy, and disappointing economic data. But equities quickly rallied when US trade representatives said China is close to finalizing parts of the trade agreement’s first phase.

December gold futures added $0.50, or 0.03%, to $1,505.20 per ounce at 16:33 GMT on Friday on the Comex division of the New York Mercantile Exchange. Gold prices were as high as 1% in the morning, before paring those gains. But the precious metal is on track for a weekly jump of 0.8%, adding to its year-to-date increase of 17.2%.

Silver, the sister commodity to gold, is rallying to finish the trading week. December silver futures rose $0.17, or 0.95%, to $17.975 an ounce. The white metal is poised for a weekly surge of 2.3%. So far on the year, prices are up 15.5%.

On Friday, the US Trade Representative (USTR) office said in a statement that Washington and Beijing are close to finalizing parts of phase one of the comprehensive trade agreement. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin had a telephone conversation with Chinese Vice Premier Liu He and the three individuals addressed specific issues.

They made headway on specific issues and the two sides are close to finalizing some sections of the agreement. Discussions will go on continuously at the deputy level, and the principals will have another call in the near future.

When asked by reporters about the state of US-China negotiations, President Donald Trump told the press:

We’re doing very well. We’re moving along nicely. We’re dealing with them right now. And a lot of good things are happening with China. They want to make a deal very badly.

Financial markets were initially sour on disappointing US economic data. New orders for manufactured durable goods fell 1.1% in September, durable goods orders ex defense slipped 1.2% last month, and shipments of US capital goods dropped. Also, new home sales tumbled 0.7%.

Analysts say that the latest data will likely encourage the Fed to cut interest rates for the third time this year during next week’s Federal Open Market Committee (FOMC) policy meeting. Should the central bank approve a quarter-point reduction, the benchmark target range would be between 1.50% and 1.75%.

In other metal markets, November copper futures edged up $0.005, or 0.21%, to $2.6735 a pound. December platinum futures advanced $8.60, or 0.93%, to $933.70 per ounce. December palladium futures shed $4.50, or 0.26%, to $1,743.40 an ounce.

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