The prices of gold were unchanged on Monday, December 9, 2019, as the markets wait for clues if the U.S. will implement a planned round of tariffs on Chinese products. Investors are also waiting for the Federal Reserve’s meeting later this week to see whether the central bank will stand by its position not to make further interest rate cuts.
U.S. gold futures were unchanged at $1,464.50 per ounce and spot prices did not move at $1,460 an ounce.
The Fed is scheduled to meet between December 10-12 to make its decision on interest rates for the last time this year. The markets will be monitoring and analyzing the monetary policy outlook. But is it not likely that the Fed will touch interest rates given the strong jobs data for November. The interest rate announcement will be on Wednesday.
Meanwhile, Director of the National Economic Council Larry Kudlow has reaffirmed the December 15 deadline for the imposition of new tariffs on Chinese products worth around $156 billion.
According to DailyFx senior currency strategist Ilya Spivak – if the tariffs are implemented then the yellow metal could experience an upside breakout. However, he also noted the administration’s practice of brinkmanship and suggested the possibility that the White House may cancel the tariffs at the last second before the deadline.
The potential resurgence of the precious metal could be limited by strong U.S. jobs data in November and the growth of China’s imports. When the jobs growth was announced, gold had its biggest daily price decline in a month at 1%.
Daniel Hynes, an ANZ analyst, expects the bullion to remain under pressure because of the better-than-expected economic data released last week.
In a related development, the holdings of the largest gold-backed ETF SPDR Golf Trust dropped by 0.26% last Friday. This is the lowest level since September 19. Some traders and investors have also raised their bullish stance in COMEX gold for the week which ended on December 3.