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FXTM: gold losing luster ahead of trade deal

Kitco News

Editor's Note: 2020 is expected to be another year of significant uncertainty and turmoil. But the question is what asset will emerge the victor when the dust settles from the global trade war, Brexit, recession threats, negative bond yields. It's a showdown of global proportions, so don't miss all our exclusive coverage on how these factors could impact your 2020 investment decisions.

Gold has fallen to its lowest level since Jan. 3 on the day before the U.S. and China are scheduled to sign a “phase one” trade deal, said Lukman Otunuga, senior research analyst at FXTM. As of 9:11 a.m. EST, spot metal was $3.90 lower to $1,543.50 an ounce. Anticipation of the trade deal has “boosted risk sentiment and blunted appetite for safe-haven assets,” Otunuga said. He added that the metal could extend its losses when the U.S. and China formally sign. “However, the precious metal may rebound if the finer details of the deal underwhelm markets,” the analyst continued. The analyst added that the $1,555 level will be a key chart point. “A daily close below this point should signal a decline towards $1,535,” Otunuga said. “However, a move above $1,555 may open the doors towards $1,570.”

By Allen Sykora of Kitco News;


RBC’s Gero: gold continues retreat prior to signing of trade deal

Tuesday January 14, 2020 09:15

Gold is continuing to retreat on news that a U.S.-China trade accord, scheduled to be signed on Wednesday, will mean “landscape changes,” said George Gero, managing director with RBC Wealth Management. He added that gold also pulled back from recent “overbought conditions.” The metal hit a roughly seven-year high last week on U.S.-Iran tensions. Still, Gero said, with “many worries still around,” some investors are looking to buy through “bottom picking,” with longer-term investors still interested in gold. As of 8:59 a.m. EST, Comex February gold was $6 lower to $1,544.60 an ounce.

By Allen Sykora of Kitco News;


Commerzbank: gold correcting lower on profit-taking

Tuesday January 14, 2020 09:15

Gold is continuing its recent downward correction on selling in the form of profit-taking, said Daniel Briesemann, analyst with Commerzbank. As of 8:55 a.m. EST, Comex February gold was down $7 to $1,543.60 an ounce and had lost 4.3% since last week’s peak at $1,613.30. “We attribute this to further profit-taking,” Briesemann said. He pointed out that outflows from gold-backed exchange-traded funds continued Monday, with just shy of four tons removed from vaults. “The news backdrop at present is not conducive to rising gold prices, and is more likely to cause the correction to continue,” Briesemann said. “This is because there is considerable optimism among market participants, especially with respect to the (partial) trade agreement between the U.S. and China. In addition, the economic data from China have been better of late, including today, and the situation in the Middle East has not escalated any further.”

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