The prices of gold on Monday, December 23 increased slightly as the markets wait for concrete developments on the interim trade agreement between the U.S. and China.
U.S. gold futures increased by 0.3% to $1,484.70 an ounce while spot gold prices rose by 0.2% to $1,480.77 as of 0349 GMT.
Last Friday, U.S. President Donald said he had a “very good talk” with his Chinese counterpart Xi Jinping. He later tweeted that China has started purchasing large amounts of agricultural products from the U.S. which is part of the agreement. On Saturday, he said they achieved a breakthrough in their negotiations and are very close to signing the Phase One agreement.
According to National Australia Bank economist John Sharma, despite some positive developments in the U.S.-China talks, the precious metal is still somewhat supported because the two parties have yet to come up with a comprehensive deal. Also, the Federal Reserve’s firm stand not to raise interest rates will make gold more affordable. Sharma expects the bullion to trade in the $1,470-$1,480 price range.
The Fed’s policy not to touch interest rates any time soon is supported by the recently released U.S. economic data. Consumer spending rose in November while real gross domestic product grew by 2.0% in the third quarter.
Meanwhile, some gold investors and traders have expressed concerns after the National People’s Congress (NPC) of China criticized the U.S. Senate’s passage of the National Defense Authorization Act (NDAA) as an “interference.” The NDAA requires reporting on the treatment of Muslim minorities in Xinjiang and calls for support to pro-democracy protesters in Hong Kong. It would also require the U.S. to provide military support for Taiwan which Beijing considers as part of Chinese territory. Trump promised to quickly sign the bill into law.
In a related development, market speculators have raised their bullish stance on COMEX gold contracts for the week which ended on December 17. The holdings of the largest gold-backed exchange-traded fund in the world SPDR Holdings increased by 0.3% to 885.93 tons which reflect investor sentiments.