Gold price steadies as investors seek clarity on U.S.-China trade deal

London (Dec 16)  "Based on gold's reaction, it appears the market is not very convinced about the deal... in the sense that this is not really a breakthrough in terms of lifting growth globally, in the U.S. or China," said Julius Baer analyst Carsten Menke. "Gold market investors are still a bit sceptical about the growth outlook next year so they prefer to hold onto their positions."

The deal, announced on Friday, will reduce some U.S. tariffs on Chinese goods in exchange for increased Chinese purchases of U.S. agricultural, manufactured and energy products by some $200 billion over the next two years.
The news pushed up world stock markets, which were trading a notch below a record high hit last week. U.S. Trade Representative Robert Lighthizer on Sunday said U.S. exports to China will nearly double over the next two years, although officials are yet to decide a date to sign the agreement. "There still remain concerns about what this deal entails and how much this phase one trade deal will alleviate the downward pressure on the global economy going into 2020," said FXTM market analyst Han Tan.
Gold has risen 15% this year on the backdrop of the months-long tariff war and its impact on the global economy.

Data on Monday showed euro zone business growth remained weak in December. "My outlook (for gold) is for strong support at $1,474 then $1,411 with a rally to $1,500-$1,511, and $1,544 in extension," said Nicholas Frappell, global general manager at ABC Bullion. Also, the dollar eased against a basket of rivals, making gold cheaper for holders of other currencies. Speculators slashed their bullish positions in COMEX gold contracts in the week to Dec. 10. Elsewhere, palladium climbed 1.2% to $1,954.21 an ounce. The autocatalyst metal hit a record high of $1,979.95 on Friday driven by supply concerns. Silver gained 0.5% to $17.02 per ounce, while platinum was up 0.3% at $930.36.

Reuters