Gold Price Continues Upward on New Trade-War Uncertainty

Gold price is soaring once from a push higher by gold bars and awaiting such gloomy news.

December delivery of old futures on New York’s COMEX increased $9.60, or 0.7%, at $1,463.30 per ounce. The Wall Street Journal forecast that the trade negotiations stand over agriculture buys.

President Trump said China committed to purchasing up to $50 billion in U.S. soybeans, pork, and other agricultural products. This is a part of their “phase one” trade deal. Contrarily, China is unwilling to measure its farm purchases, easing hopes on the signing of the “phase one” agreement.

Also, China is resisting U.S. demands to make improvements to the forced technology transfer. Trump administration recently said it would be talked in future trade agreements with Beijing.

Spot gold increased $6.112, or 0.4%, at $1,463.06 per ounce.

Both gold futures and bullion increased in after-hours trade after hitting a three-month decrease for three consecutive days.

The rebound came after Trump said at the NYEC that the signing of the much-anticipated “phase one” deal with China would happen soon. Also, he still wants the deal to be good for the U.S. economy and firms.

Despite the rebound of gold, some analyst was still chanting caution on the metal. It has lost $50 from last month’s highs above $1,500.

Analyst at TD Securities said the balance of risks remains on the downside, as bloated long positioning will probably continue to weigh on prices.

Moreover, open interest still rests near all-time highs, which suggests that a shake-out of the excess length has yet to take place. Meanwhile, the estimated breakeven entry point for the bulls is close to market pricing at $1,438/oz. It suggests that the pain trade is still to the downside in the near term.

Gold Price Bounced After Powell’s Testimony

Gold price and silver price rebounded as the negative comment of President Trump’s speech screened through markets.

In a keynote speech, Trump played down talk of a mutual roll-back of tariffs with China. Also, he threatened to increase import tariffs much higher. At the end of the year, such a step could rapidly feed through into a more slowdown in the global economy. Also, it requires more policy support from the world’s central banks yet.

Prices held in narrow ranges as the market awaited Congressional Testimony from Fed’s Chairman. Markets have all but ruled out any action from the Fed at its December policy meeting. However, many still anticipate it to cut U.S. interest rates again next year against the setting of slowing economic growth.

Costumer inflation data released earlier did not strengthen the case for Fed action significantly. Although the outer rate of inflation decreased to 2.3% from 2.4%, the headline number increased to 1.8% from 1.7%.

Gold futures for delivery on the COMEX exchange bounced to $1,464.85 a troy ounce, increased 0.8% on the day, and rose almost 1%.

Spot gold increased 0.4% at $1,463.45 an ounce.

Although the rally in gold and other haven assets rest in previous weeks, some said that the long-term strategic support to prices hadn’t gone away.

ABN AMRO said they are keeping their year-end report for 2020 at $1,600 per ounce.

Elsewhere, silver futures increased 1.25 to $16.90/oz. Also, platinum futures bounced 0.4% to $873.90.

Meanwhile, the U.S. government bond yields dropped by between 1 and 3 basis points.