December 20, 2019
Gold inches lower on trade cheer; focus on U.S. GDP data
(Reuters) - Gold prices inched lower on Friday in range-bound trade, pressured by increased risk appetite on hopes of an interim Sino-U.S. deal being signed soon, while investors awaited U.S. GDP data release for fresh cues.
U.S. Treasury Secretary Steven Mnuchin said on Thursday the United States and China would sign their so-called 'Phase one' trade pact at the beginning of January, adding that it would not be subject to any renegotiation.
Spot gold fell 0.1% to $1,478.33 per ounce by 0451 GMT and was set to gain for the fifth straight quarter. U.S.
gold futures were down 0.1% to $1,482.70 per ounce.
"The real driver for gold markets has been trade war risk and with its de-escalation in phase one on the back of Mnuchin's comments is not bullish for gold," said Stephen Innes, a market strategist at AxiTrader.
China's Finance Ministry unveiled a new list of import tariff exemptions for a duration of one year starting Dec. 26 for six chemical and oil products from the United States.
Investor demand for gold was further pressured as Asian shares firmed ahead of the holiday season, holding close to 18-month peaks. The dollar was steady, even as it gained for the
first week in four, supported by better-than-expected U.S. economic data.
The initial jobless claims report was strong with applications for unemployment benefits slipping from a more than two-year high, while factory activity data for the Mid-Atlantic region was almost flat in December.
"Prices remain exposed to further upside risk in 2020," Standard Chartered Bank analyst Suki Cooper said in a note.
"Key factors to watch for gold next year will be the second phase of the U.S.-China trade negotiations, the U.S. election, global monetary policy, and the investor response to these
Meanwhile, in Britain, Prime Minister Boris Johnson promised to "get the Brexit vote wrapped up for Christmas", following his landslide election victory.
Investors now await U.S. gross domestic product data due to be released later on Friday.
Elsewhere, palladium rose 0.4% to $1,944.44 per ounce. Prices of the autocatalyst metal had hit an all-time peak of $1,998.43 on Tuesday on a sustained supply crunch.
Silver was flat at $17.06 per ounce, while platinum edged up 0.1% to $934.39.