Gold prices remain in ‘holding pattern’

Bengaluru — Gold prices were largely subdued on Wednesday, with investors awaiting more details on US-China trade deal, while palladium retreated from last session’s record peak.

Spot gold was flat at $1,476.55/oz at 3.54am GMT. US gold futures were little changed at $1,480.80/oz. “Gold is in sort of a holding pattern and one of the key reasons behind this is that the macro picture has been positive on the trade deal and it has obviously capped gold prices,” said ING analyst Warren Patterson.

“But the main issue is they are not saying anything significant on the back of this deal and details around the trade deal are still lacking, there’s that element of uncertainty.”

US trade representative Robert Lighthizer said on Tuesday that details of Chinese purchases across various sectors in the US in the “phase one” deal would be detailed in writing, but gave no further details about when the written agreement would be released.

Bullion’s upside remained capped by positive US economic data that underpinned the dollar and stock markets. The dollar index hovered near a one-week high against a basket of rival currencies, while Asian shares camped out at 18-month peaks having climbed for five straight sessions.

US manufacturing production recovered in November and housing numbers rose beyond expectations with permits for future home construction soaring to a 12-and-a-half-year high on lower mortgage rates.

Meanwhile, two US Federal Reserve policymakers on Tuesday upheld the central bank’s stance on leaving interest rates steady and said the bar to cutting or raising them would be high. “With the federal open market committee continually reminding us that rates are on hold indefinitely, it adds an element of support for gold but will not necessarily catapult prices higher. For that, we need a dovish Fed impulse,” AxiTrader market strategist Stephen Innes said in a note.

Reflecting investor interest in bullion, holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.6% on Tuesday.

Palladium slipped 0.8% to $1,939.91/oz, retreating from a record high of $1,998.43/oz hit in the previous session. “The market set their sights on the key target, once we did that, we definitely did see some profit-taking — that’s the reason we saw that price inflection,” ING’s Patterson said.

Silver edged 0.1% higher to $17.02/oz, while platinum fell 0.1% to $926.65/oz. 

Reuters