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Gold Rebounds As Investors’ Trade Hopes Dim, Dollar Weakens

November 18, 2019 at 18:05 by Andrew Moran

Gold futures are rebounding on Monday after trading in negative territory in the morning session. In recent weeks, the yellow metal has failed to repeat the momentum it enjoyed the last two months, driven by general optimism over US-China trade negotiations. But investors’ positive sentiment is quickly fading as there are concerns between both sides pertaining to phase one and recent remarks by leaders in Washington and Beijing.

December gold futures edged up $4.70, or 0.32%, to $1,473.20 per ounce at 16:41 GMT on Monday on the Comex division of the New York Mercantile Exchange. Gold prices recorded a 1% weekly jump last week, bringing the yellow metal closer to a 15% gain on the year.

Silver, the sister commodity to gold, is also rising to start the trading week. December silver futures climbed $0.06, or 0.37%, to $17.01 per ounce. The white metal also posted a 1% increase last week, paring some of its enormous losses in recent weeks. Year-to-date, silver is up 9.3%.

Metal commodities have been surviving the onslaught of fresh all-time highs in the equities market. Gold’s safe-haven appeal had been slightly diminished, but fears that US-China trade negotiations could sour renewed its attraction for traders wanting to escape the risk.

It was reported that Chinese government officials are concerned over President Donald Trump’s latest comments that he refuses to rollback any tariffs, even if the first phase of a comprehensive trade agreement is signed. But then these reports were offset by Chinese state media describing a telephone call between Treasury Secretary Steven Mnuchin, Trade Representative Robert Lighthizer, and Chinese Vice Premier Liu He as “constructive.”

Analysts do note that gold bugs do need to be concerned should the world’s two largest economies establish phase one of a trade deal. If it does happen before the year is over, then there will certainly be a late-year push in stocks and then a generally bullish nature throughout 2020. At the same time, some observers do note that the 18-month trade war has done a lot of damage and it could be a while before both economies recuperate from the prolonged spat.

Meanwhile, investors will wait for minutes from the Federal Reserve’s recent policy meeting, which could provide clues as to how the central bank will move on interest rates. The official position is that any rate cuts have been put on hold until economic data requires more accommodation. Also, Fed Chair Jerome Powell and President Trump held a “polite and cordial” meeting to discuss the economy and monetary policy. It was reportedly made clear by Powell that any monetary decision made by the Fed remains “non-political.”

A lower US dollar helped gold prices as the greenback slipped 0.25% to 97.74, from an opening of 97.98. A weaker buck is good for commodities priced in dollars because it makes it cheaper for foreign investors to purchase.

In other metal markets, December copper futures tumbled $0.02, or 0.8%, to $2.615 per pound. December platinum futures rose $1.20, or 0.13%, to $895.70 an ounce. December palladium futures surged $22.30, or 1.33%, to $1,704.80 per ounce.

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