Precious Metals Trade Sideways As Equity Markets Trade Positive on Sino-U.S. Trade Talk Headlines

Gold prices were firm on Wednesday, supported by expectations of fewer rate hikes by the U.S. Federal Reserve next year. However short-term price action is expected to remain sideways as uncertainties surrounding Brexit keeps demand for safe-haven assets high while Sino-U.S. trade talks related optimism limits safe-haven demand while also reducing demand for USD which helps decrease the value of the dollar in broad market providing opportunity for investors from emerging markets to stock up on gold in small volume.

The Fed is widely expected to raise rates at its Dec. 18-19 meeting, but the market is focusing on how much further it might lift rates next year, after recent comments by Fed members to decide the monetary policy based on data have been taken as a signal for lower rate hikes in 2019.

Gold Regains Safe Haven Demand As Dollar Turns Dovish on Fed Rate Hike Outlook

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund is currently near 5 months high and has been on steady upward move over last two weeks which has been widely interpreted by traders and analyst alike as positive sign for gold and few even state that safe-haven status of gold is back which is indicative of positive investor sentiment toward the bullion.

As of writing this article, Spot gold XAU/USD is currently trading flat at $1242.70 an ounce down by 0.03% on the day while US Gold futures GCcv1 is trading at $1247.90 an ounce up by 0.05% on the day. Gold continues to trade range bound near multi-week highs at $1240 handle while upside faces resistance around $1253 which if broken could help spot gold close for the year at or above $1260 per ounce.

Spot Silver XAG/USD is currently trading at $14.56 an ounce up by 0.05% on the day. Oil prices climbed by more than 1% in Asian market hours, lifted by expectations that an OPEC-led supply cut announced last week for 2019 would stabilize markets as well as hope that long-running Sino-American trade tensions could ease. Disruptions to Libyan oil exports after local militia seized the country’s biggest oil field, El Sharara also continues to affect crude oil price action.

The bullish price boost was influenced in Asian hours as Asian markets which were huge importers of crude oil on news from Reuters which stated that US President Donald Trump was optimistic about ongoing proceedings in trade talks and was looking forward to a positive resolution between two parties. Spot US Crude Oil WTI/USD is currently trading at $52.02 per barrel up by 0.21% on the day.