Gold Advances Ahead of Fed Meeting Minutes

Gold prices are starting to gain upward momentum as risk sentiment fades.

Gold

The prices of gold increased slightly on Wednesday, November 20, 2019, after U.S. President Donald Trump issued a threat that could intensify trade dispute with China. He warned yesterday that if no deal is signed with China then he would again lift tariff on Chinese products.

U.S. gold futures were unchanged at $1,474.40 an ounce but spot prices gained by 0.1% to $1,473.98 an ounce.

The yellow metal was also supported by the U.S. Senate’s passage of the Hong Kong Human Rights and Democracy Act of 2019 in support of protesters in the semi-autonomous Chinese city. DailyFx senior currency strategist said the bill could negatively affect the U.S.-China trade negotiations.

The Senate approved another legislation that would ban American companies from exporting non-lethal crowd-control munitions to Hong Kong where these items are used by the police against protesters demanding electoral reforms. The Chinese government condemned the Senate’s actions and called on the U.S. government to stop interfering in the Hong Kong issue.

Despite these developments, the gains of the precious metal were limited because investors are still waiting for the release of the minutes of the Federal Reserve’s latest meeting. The Feds has already cut interest rates three times this year but indicated that there would be no more cuts unless the U.S. economy needs an urgent push to sustain growth.

Meanwhile, the trade deal uncertainty caused a slight dip in the Asian equities market. In contrast, the global stock market maintained a strong rally. Though the strength of the global equities market weighs on gold, Phillip Futures analyst Benjamin Lu believes that the mid-term outlook of the precious metal remains bright. He said it will be supported by geopolitical uncertainties and concerns about global economic growth.

Given the current political and economic situation, Reuters’ technical analyst Wang Tao predicts that spot gold prices may go up to the $1,480-$1,485 price range.

 

Source: PRECIOUS-Gold gains on concerns over U.S.-China trade deal, HK protests