There was no movement in gold prices on Thursday, October 24, 2019. U.S. spot futures and spot prices remained flat at $1,495.10 an ounce and $1,492.34 an ounce, respectively.
Investors and traders were waiting for new developments in the Brexit agreement and the U.S.-China trade negotiations.
According to OANDA analyst Jeffrey Halley, the yellow metal is already at the bottom of its medium-term price range which indicates a possible future price drop. A positive outcome of U.S.-China trade talks can trigger this price decline. He predicts that a break from the $1,460/ounce price level could encourage long-term gold owners to go into profit-taking mode.
The U.S.-China trade war has already pushed major central banks to reduce interest rates and has significantly affected the financial markets. Both parties have imposed a series of tariffs which drove gold prices to increase by 16% so far this year and triggered fears of a global economic slowdown.
On the Brexit issue, members of the European Union (EU) have deferred their decision on British Prime Minister Boris Johnson’s request for a three-month extension. Johnson said he plans to call for an election in December if the EU agrees to postpone the Brexit deadline until January 2020.
Meanwhile, gold traders and investors are waiting for developments that could affect the markets. These include the meeting of the European Central Bank and the release of manufacturing data from the U.S. and Europe. They are also waiting for the October meeting of the U.S. Federal Reserve. Based on the movement of federal fund futures, gold traders and investors appear to be expecting a 25-basis point interest rate cut.
The uncertainties related to Brexit and the U.S.-China trade talks have also affected the Asian stock markets. The equities market made slight gains but corporate earnings were down because investors were worried about the potential impact of Brexit and the trade negotiations.
In a related development, the holdings of the largest gold-backed exchange-traded fund SPDR Gold Trust dropped from 919.66 tons on Tuesday to 918.48 tons on Wednesday.