Investors, on Tuesday, maintained composure on the world’s most prized precious metal, gold as they wait for the outcome from the U.S. Federal Reserve two-day rate-setting meeting and an undecided plan to initiate another tariff on Chinese goods or not on December 15.
Spot gold fell by 0.1 percent at $1,461.10 per ounce early Tuesday while U.S gold futures rose by 0.1 percent at $1,461.10 per ounce.
According to Margaret Yang Yan, a market analyst said both moves by the Feds and plan to look into another tariff imposition on Chinese goods could be the basis for the precious metal to go down.
“Both the events could be potential catalysts for gold, prices could go down if the Fed is more hawkish biased. However, in case the US and China can’t reach any resolution and tariffs kick in, traders will move back to the safe-haven gold,” said Yan.
The U.S government according to Sonny Purdue is keen on withdrawing the December tariff on Chinese good but he is on the lookout for China’s positive move in showing concern for a trade agreement.
In conformity with Yan’s claim, Edward Mier said both gold and silver would play along with the outcome from the U.S government’s decisions.
He said, “Given that we are tilting toward some sort of the deal being reached with the Chinese, we think both gold and silver will struggle to go into year-end and see a lower trading range for both over the next few weeks.”
“The rally so far this year has been driven by tight supply, reflected in a persistent back in the forward curve and elevated lease rates. We suspect that palladium has more room to run, with $2,000 looking to be the next logical resistance level,” Mier added.
Spot gold is expected to rally at $1,455 per ounce a little above $1,440 according to a market technical analyst.
However, the presumed China’s unfriendly posture for a trade deal with the U.S could be as a result of the alternatives it has with Brazil and Argentina importing its main agriculture product, soybean since the past months.
But, analysts hope that this sudden pact with the Southern America countries is only but for a while.
Other metals, palladium rose by 0.2 percent at $1,885.31 per ounce, an all-time high of $1,898.50 on Monday while silver remained at $16.60 and platinum gained 0.5 percent support at $899.09.