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James Hyerczyk
Comex Gold

Gold futures started the week lower, but quickly turned higher after President Donald Trump said he would not hesitate to raise tariffs if China did not agree to a trade deal. The market was further supported after Reuters reported trade negotiations had hit a snag over the rollback of tariffs. There were also headlines saying a trade deal would be delayed into early 2020, and concerns that China would be upset by U.S. legislation supporting the pro-democracy protesters in Hong Kong.

Last week, December Comex gold futures settled at $1463.60, down $4.90 or -0.33%.

Gold hit its high for the week after the negative headlines created by “unnamed sources” were seemingly put to bed on Thursday after Gao Feng, China’s Ministry of Commerce spokesman said, “external rumors” about trade talks are not accurate, and noted the two trade delegations remain in close communication.

Shortly afterwards, there was a report that China invited the U.S. trade delegation to Beijing for face-to-face talks. President Trump then told Fox News both sides were “very close,” and Chinese President Xi Jinping told a visiting U.S. business delegation that China holds a “positive attitude” toward the trade talks.

Gold finished the week lower after U.S. stock indexes firmed and Treasury yields rose on renewed optimism over a trade deal and better-than-expected U.S. economic data. A stronger U.S. Dollar also led to reduced demand for dollar-denominated gold.

Weekly Forecast

Gold traders will be keeping an eye on news regarding the progress of U.S.-China trade talks, but low U.S. holiday volume could hold the market in a tight trading range.

The major reports this week are Conference Board Consumer Confidence on Tuesday and Chicago PMI on Wednesday.

Minor Reports include Tuesday’s Richmond Manufacturing Index, and Wednesday’s Durable Goods, Preliminary GDP, Core PCE Price Index and Personal Spending.

It’s hard to tell what kind of an impact the low holiday volume will have on the gold trade. Low volume often holds prices in a range, but it sometimes also allows a rogue trader to spike the market in either direction.

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