The prices of gold moved very slightly on Wednesday, December 11, 2019, as traders and investors wait for updates on tariffs on Chinese goods and the release of the U.S. Federal Open Market Committee’s (FOMC) policy statement.
U.S. gold futures dropped by 0.1% to $1,467.40 an ounce and spot prices fell by the same rate to $1,463.20 an ounce.
The U.S. central bank is scheduled to release economic policy statement later today. And while it is not expected to make any changes to the interest rates, the markets want to know its opinion on the economic outlook of the U.S. which has been significantly affected by the trade war.
According to Jeffrey Halley, OANDA’s senior market analyst for the Asia Pacific, the FOMC’s updating of the “dot-plot” will be closely monitored since the markets are in a wait-and-see mode. Not only gold but also the foreign exchange, oil and stock markets. They are closely watching how the events will unfold in the second half of this week. He suggested that a dovish statement from the FOMC will lift the prices of yellow metal because it could weaken the U.S. dollar.
Meanwhile, the Wall Street Journal reported yesterday that the American and Chinese negotiators are working on a deal to delay the implementation of tariffs on Chinese consumer goods worth around $160 billion. The deadline for this fresh round of import duty is on December 15. U.S. President Donald Trump has yet to make his final decision on the issue. He reportedly wants China to commit to massive purchases of agricultural products from the U.S. as part of the deal for suspension of the December tariffs.
If the two parties fail to reach an agreement on tariff suspension, it would weaken risk appetite and benefit the precious metal in the near-term, according to Benjamin Lu of Phillips Futures.
On the technical aspect of trading, Reuters’ technical analyst Wang Tao noted the mixed signals for spot gold prices as it keeps moving towards the resistance price level of $1,466 an ounce.