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Gold Prices Continue to Rise Gaining $27 Since Last Tuesday

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Gold Futures traded to a higher high, and a higher low than yesterday’s price range. The most active December contract also closed fractionally higher on the day. As of 4 PM EST gold is currently up one dollar at $1472.90. This is an extremely fractional gain of .05%. However, the fractional gains seen in gold pricing today also had to overcome fractional dollar strength. Currently the U.S. dollar index is trading fractionally higher on the day and currently fixed at 97.735, after factoring in a gain of .072 points.

All the other precious metals in the complex traded significantly higher on the day outperforming any gain seen in gold to a great extent. Silver had net gains of .71%, or $0.12, which takes current pricing of silver futures to $17.12 per ounce. While palladium gained 1.83% today, it was platinum that had the largest percentage gain in trading. Platinum added 2.11% of value and after factoring in today’s $18.80 gain is currently fixed at $913.80.

Market participants and traders are currently focusing in upon the upcoming release of last month’s FOMC meeting. However, statements from the Fed Chairman as well as John Williams the president of the New York Federal Reserve Bank this week both signaled that current monetary policy from the Fed should be on hold at least throughout the end of the year. On Tuesday John Williams said that the “economy is clearly facing several challenges, primarily from overseas, but the three rate cut since July should help sustained growth”.

Another major factor market participants are focusing upon is the ongoing trade negotiations and the lack of clarity or progress. As we spoke about yesterday it seems as though both the United States and China have issued statements that have had an extremely short shelf life. For example, on Friday of last week statements by both countries suggested real headway in progress had been made to the final draft of a “phase one” agreement. Then on Sunday officials from the Chinese government stated that they were much more pessimistic and had come to a stalemate regarding some of issues found within this interim agreement.

As reported in MarketWatch, James Hatzigiannis, Senior strategist at Longleaf trading group said that, “Gold is awaiting more clarification on the US/China trade front… Until there is a clear indication straight from the US or China on the trade deal, gold will just hang out at this level for the time being.” He also spoke about the fact that China is looking closely and awaiting to see how the current impeachment process on President Trump unfolds. “If President Donald Trump’s “political position takes a hit or weakens from this impeachment process,” China may be hoping that can “decrease or soften his [trade deal] demands.”

Even with today’s extremely fractional gain in gold taking pricing just below $1473, I believe one of the most important factors occurred one week ago today, when gold hit a low of $1446.20 before recovering and achieving a gain of approximately $27 in a single week of trading. If anything, it clearly demonstrates that the recent price gains in gold have been influenced by the lack of clarity and the ongoing uncertainty as to the current status of negotiations in a trade war between two superpowers that is in its 18th month. Until there faith that both leaders are able to find a common ground, we could see gold pricing hold its ground and find support in this area and even trade higher.

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Wishing you as always, good trading,

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