· Gold edged higher overnight as uncertainty emerging from mixed messages on the US-China trade negotiations offset headwinds from positive economic data out of the United States while deficit-hit palladium extended a record surge.
· Spot gold was up 0.2 per cent at $US1,477.12 per ounce, having hit its highest since November 7 at $US1,484 the previous day.
US gold futures settled up 0.2 per cent at $US1,483.10 per ounce.
· "We're seeing safe haven demand for gold," said Quantitative Commodity Research analyst Peter Fertig.
"As long as (US President Donald) Trump does not make a clear statement about what he wants, the markets will remain puzzled," said Fertig.
· Tariffs must be cut if the US and China are to reach an interim trade agreement, the Chinese commerce ministry said on Thursday. This came a day after Trump said trade talks were going "very well," which were in contrast to his previous comments, suggesting a deal might have to wait until after the 2020 US presidential election, denting risk appetite.
· On the technical side, a break below the key support around $US1,450 could prompt a test of the $US1,400 level, Standard Chartered Bank analyst Suki Cooper said in a note.
"For now, the physical market is providing a sufficient cushion against the downside, and we believe the macro environment presents upside risk to prices in 2020."
· Also helping gold, the US dollar slipped versus major currencies, making the metal cheaper for investors holding other currencies.
· Limiting the upside for safe-haven bullion, however, were positive economic readings from the United States. Data showed initial claims for state unemployment benefits dropped to the lowest level since mid-April for the week ended November 30, while US trade deficit dipped to its lowest level in nearly one and a half years in October.
· Technical Analysis
Gold prices continued to consolidate on Thursday with gold implied volatility dropping to the lowest levels of the year. Resistance near the 50-day moving average near 1,482. Support is seen near the 10-day moving average at 1,464. Additional support is an upward sloping trend line that comes in near 1,454 and then the November lows at 1,443. Short term momentum remains positive as the fast stochastic generated a crossover buy signal and continues to accelerate higher. The fast stochastic is closing in on the overbought trigger level, but the current trajectory points to higher prices. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.
· Elsewhere, palladium continued its record run, scaling an all-time peak of $US1,876.54 an ounce on concerns over supply of the auto catalyst metal. It was last up 0.1 per cent at $US1,871.93.
· "Constrained mine supply and growing demand should send palladium into its ninth straight year of market deficit in 2020," UBS commodity analyst Giovanni Staunovo said in a note.
· Among other metals, platinum rose 0.4 per cent to $US897.88 while silver climbed 0.8 per cent to $US16.95.
Reference: Business News, FXEmpire
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