The prices of gold gained slightly on Monday, November 11, 2019, after dropping to its lowest pricing level in three months during the previous trading session. Spot prices increased by 0.3% to $1,462.83 an ounce while U.S. gold futures remain unchanged at $1,462.90 an ounce.
The yellow metal was boosted by the uncertainty in the U.S.-China trade negotiations which trigger renewed concerns over a global economic slowdown.
Brian Lan, a Singapore-based dealer with GoldSilver Central, said that investors are taking advantage of low gold prices because they know the precious metal still has a long-term positive outlook because the trade dispute remains unresolved. Central banks’ purchasing of gold is also helping push the gold prices up. He added that a failure to reach a trade agreement could send gold back to the $1,500 pricing level.
OANDA analyst Jeffrey Halley believes that the next support pricing level for gold is $1,450. If it breaks through that level then it could go down to as low as $1,400 an ounce.
It was previously reported that the U.S.-China trade talks are moving smoothly and the two parties have agreed to reduce tariffs as part of phase one of the agreement. However, U.S. President Donald Trump denied the tariff rollback and said that a deal would only be right if it slightly favors the U.S.
The trade deal uncertainty also weighed on the Asian stock market.
Meanwhile, in China, the producer price index declined by 1.6% in October, falling short of the analysts’ prediction of 1.5%. This is the sharpest drop since July 2016 and further fueled concerns about global economic conditions.
In India, the buying of physical gold recovered after a price correction which sent prices to a five-month low. In other parts of Asia, the interest in the yellow metal remains weak.
In a related development, the holdings of the largest gold-backed exchange-traded fund SPDR Gold Trust dropped by 1.44% to 901.19 tons on Friday.