Gold prices holding steady, waiting for potential trade fallout after Thanksgiving holiday
(Kitco News) - The gold market is treading water Thursday as U.S. markets are closed for the Thanksgiving holiday and see a shorted trading day Friday.
The spot market, which remains open, shows gold prices holding steady at $1,454.90 an ounce.
However, some analysts see the prospect of higher prices when markets get back to normal next week as the trade war between China and the U.S. hit a potential snag.
Wednesday, as the U.S. was preparing for the holidays, President Donald Trump signed into law legislation backing pro-democracy protesters in Hong Kong. The law has angered the Chinese government, which called it arrogant and full of prejudice.
Some market analysts expect that the new tensions could have an impact on the ongoing trade talks, which Trump said were in the “final throes” of a phase one agreement.
“Trump is still keen to achieve such a deal, however. China has already announced that it will resolutely oppose the bill and that it will take retaliatory measures,” said analysts at Commerzbank. “The uncertainty over what will happen next in the trade dispute remains, in other words, which should benefit gold as a safe haven.”
Many analysts have noted that the headline volatility surrounding the global trade talks will continue to support gold prices. Ole Hanse, head of commodity strategy at Saxo Bank, said that he remains bullish on gold in the long-term even if there is continued selling pressure in the short-term.
Gold prices need to push above $1,480 to see renewed bullish momentum, he added.
But in the current environment, some analysts have noted that gold needs a new catalyst to drive prices higher.
In a recent telephone interview with Kitco News, David Madden said that investors need to see a renewed economic weakness in the U.S. before they jump back into gold.
“As long as the outlook for the U.S. remains positive, gold prices will continue to grind lower and the gains from the summer’s rally will be chipped away,” he said.