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Analysts: Gold Rises, Dollar Falls On U.S.-China News

Kitco News

Gold prices are starting the new week higher, boosted by weekend news of a 90-day ceasefire in the U.S.-China trade war, analysts report. The two countries agreed on no new tariffs for 90 days and indicated they would start talks on structural changes on a number of matters. “On the back of the depreciating U.S. currency, gold has climbed to a good $1,230 per troy ounce as the week gets under way,” Commerzbank says. MKS (Switzerland) S.A. reports that the metal began moving higher from the start of Asia-Pacific trading. “Regional demand led by Chinese physical interest supported the metal in early session flows, underpinned by a markedly softer USD/China [currency exchange] in conjunction with a broader offered bias to the greenback,” MKS says. “The yellow metal made a number of unsuccessful attempts above $1,225 during the morning, before headlines out of the U.S. announcing that China had agreed to reduce, remove car import tariffs gave the metal a boost through the figure.” The news weighed down the U.S. dollar further and gold probed upward some more, MKS says. As of 8:02 a.m. EST, the spot U.S. dollar index was down 0.210 point to 97.062. Spot gold was $6.55 higher to $1,228.25 an ounce and has been above $1,231. “Expect $1,230 to remain in the cross-hairs, with the figure remaining a formidable resistance over the past few weeks,” MKS says. “Supportive price action sits toward $1,220, with extension down to $1,215.”

By Allen Sykora of Kitco News;


BBH: Jobs Report, Powell Speech To Highlight Week

Monday December 03, 2018 08:20

Traders will have a several important U.S. economic indicators to digest this week, plus a plateful of Federal Reserve speakers, as markets continue to try to gauge the amount of monetary tightening to expect in the future, says Brown Brothers Harriman. “The November U.S. jobs report Friday will be the data highlight of the week,” BBH says, noting that consensus expectations are for some 200,000 new jobs, while the rise in average hourly earnings are expected to remain steady at the cycle high of 3.1% year-on-year. Other key reports include the Institute for Supply management’s manufacturing purchasing managers index on Monday and the ADP private-sector jobs report on Wednesday. “There is a full slate of Fed speakers this week before the pre-FOMC press embargo goes into effect next week,” BBH says. Five Fed officials are scheduled to speak Monday alone. The most closely watched speech will be congressional testimony on the economy by Fed Chair Jerome Powell, who is scheduled to speak before the Joint Economic Committee of the Senate Wednesday. The Federal Open Market Committee is scheduled to meet again Dec. 18-19. Markets expect another 25-basis-point rate hike but will be scrutinizing data and Fed comments closely for clues on what to expect from monetary policy in 2019.

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