Gold Stays Flat on Doubts About Phase 1 of the Sino-U.S. Deal

The prices of gold were mostly flat in early trading on Tuesday as concerns were raised about the first phase of the U.S.-China trade negotiations.

Gold

Gold

The prices of gold barely moved on Tuesday, November 19, 2019, because of renewed concerns about the first phase of the U.S.-China trade negotiations.

U.S. gold futures dropped by 0.1% to $1,470.50 an ounce while spot price remained almost unchanged at $1,470 an ounce.

It has been reported previously that China and the U.S. are close to signing the first phase of the deal. And just last weekend, the two parties reportedly had a “constructive” discussion to clarify their main concerns about the trade agreement. However, according to a CNBC report last night, the Chinese are not very optimistic about the possibility of closing the deal.

According to ANZ analyst Daniel Hynes, the indecision of the negotiating parties is keeping the prices of gold in a tight range. CMC Markets chief market strategist Michael McCarthy added that the situation is likely to keep the yellow metal in a horizontal price movement in the short term. A major price movement can only be expected if the U.S. or China confirms that there will no deal.

The current pricing of the yellow metal is somewhat supported by lingering concerns about the global economy and a softer dollar which is close to its two-week low. The MKS PAMP also noted that most of gold’s recent gains were due to profit-taking spurred by price volatility and ETF outflows.

Meanwhile, gold investors and traders have shifted their focus on the release of the minutes of the U.S. Federal Reserve’s meeting which is due to be released tomorrow. The Fed has already reduced interest rates three times in 2019 and indicated that there will be no further cuts unless there is a major economic slowdown.

The markets are also monitoring the political unrest in Hong Kong. Yesterday, dozens of protesters were able to escape from the Hong Kong Polytechnic University that was sealed off by the police. Around a hundred protesters remain inside the university.

In a related development, the holdings of the largest gold-backed exchange-traded fund in the world SPDR Gold Trust dropped by 0.6% to 891.79 tons yesterday.

 

Source: PRECIOUS-Gold holds steady amid lingering doubts over U.S.-China trade deal