James Hyerczyk
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Comex Gold

Gold futures are trading lower on Wednesday shortly after the regular session opening. The price action indicates traders are putting more emphasis on a potential trade deal between the United States and China than a report showing weaker-than-expected private sector jobs data.

Rising Treasury yields and increasing demand for risky assets are also weighing on gold prices. Losses are likely being limited by a weaker U.S. Dollar.

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At 14:45 GMT, February Comex gold is trading $1480.80, down $3.50 or -0.23%.

Trade Deal Hopes Weighing on Gold

Helping to pressure gold prices is a report from Bloomberg saying the U.S. and China were moving closer to a trade deal.

Bloomberg is reporting that the U.S. and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal despite tensions over Hong Kong and Xinjiang, people familiar with the talks said.

Treasury yields and global equity markets moved higher on the news, dampening demand gold.


Daily Forecast

Gold bounced from its lows after the release of a private payrolls report came in lower than expected, and before the release of the ISM Non-Manufacturing PMI report at 15:00 GMT.

Job growth slowed to a crawl in November, with private payrolls increasing by just 67,000, according to an estimate Wednesday from ADP and Moody’s Analytics. The number was well-below the 150,000 consensus from economists surveyed by Dow Jones and the lowest month since May.

November’s tally was a sharp decline from the 121,000 in October, which was revised down from an initially reported 125,000.

Today’s ISM services PMI report is expected to come in at 54.5, down slightly from 54.7. This report could drive gold prices lower if it comes in well above expectations. Earlier in the week, the ISM manufacturing PMI report drove gold prices sharply higher after it missed expectations while signaling a contraction in the sector.

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