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Gold Steadies While Investors are Wary of Trade Deal

The commodities market stood firm on Monday, as the dollar declined, and investors remained wary over the interim trade deal between the US and China.

Gold futures for February contract were little changed at $1,481.45, while spot gold last traded at $1,477.30 per ounce.

50 Park Investments chief executive Adam Sarhan said gold bulls believe there more unknowns than knowns with the trade agreement. Thus, that is why prices have not really fallen much in recent days.

The months-long tariff war along with its influence on the global economy has lifted gold prices by 15% this year.

The US dollar’s weakness was also another factor limiting the yellow metal’s gains, as it makes the gold cheaper for owners of other currencies.

The dollar index was last down by 0.09% to $97.08 against a basket of six major currencies.

Meanwhile, other precious metals, including palladium was up 1.6% to $1,961.91 per ounce, having posted a record of $1,979.95 in the previous session due to supply worries.

Silver gained 0.5% to $17.02 per ounce, while platinum advanced 0.4% to $933.05 per ounce.

Commodities Market Steady, Investors Await Further Details on Trade Deal  

The strength of the yellow metal was kept in check after stocks edged higher on Friday’s news of a phase one trade agreement.

Under the terms of the deal, the US and China postponed some duties on each other’s products that were supposed to be imposed on Sunday.

US Trade Representative Robert Lighthizer also stated that the agreement would nearly double the country’s exports to China over the next couple of years.  However, officials are yet to set a date to sign the accord.

Lighthizer’s remarks differed from the statement made by US President Donald Trump. He said phase two discussions would begin immediately rather than waiting until after the 2020 election.

The phase one deal fell short of market expectations. As it is probably not enough to fully restore business confidence or generate a meaningful recovery in exports or investment, according to market strategist Stephen Innes.

Innes added traders have now turned focus to the long and tough road to a phase two trade deal. So, gold prices might find some support for growing trade tensions.

Still, the precious yellow metal is not likely to weaken just yet due to lingering risks over global expansion, adding that prices will range between $1,400-$1,450 per ounce in the short term.

The Commerce Department stated on Friday that US retail sales improved by 0.2% in November. Which ended the less than the expected rise of 0.5% and the 3.3% increase registered in November 2018.



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