· Gold prices were rangebound on Tuesday, as lack of concrete details about the interim U.S.-China trade deal kept investors from making firm bets, while palladium was just $2 away from surpassing key $2,000 per ounce level for the first time.
Spot gold rose 0.1% to $1,477.15 per ounce by 0610 GMT. U.S. gold futures gained 0.1% to $1,481.50.
· Palladium was up 0.9% at $1,995.83 an ounce, after scaling an all-time peak of $1,998.43.
· "The trade situation is improving... but the weaker dollar is counter balancing that. So, we're seeing tight ranges for gold prices with these two factors running in opposite directions," said Michael McCarthy, chief market strategist at CMC Markets.
· The dollar index was little changed after posting losses in the previous two sessions, making gold cheaper for holders of other currencies.
· Investors are keen to know more about the preliminary trade deal struck between United States and China last week.
· "There is a real risk that when it comes to the actual (deal) document, we could see some market disappointment and that of course would be supportive for gold," McCarthy added.
The "Phase One" trade deal has been "absolutely completed", a top White House adviser said on Monday. However, Chinese officials have been more cautious, emphasizing that the trade dispute has not been completely settled.
· Gold, considered a safe investment in times of political and economic uncertainty, has gained about 15% this year, mainly driven by the 17-month-long tariff war and its impact on the global economy.
Capping bullion's advance, Asian shares rose to their highest in more than a year on trade deal optimism.
Among other precious metals, palladium, used mainly in catalytic converters in vehicles, has gained about 58% so far this year on sustained supply crunch.
· "Supply concerns have kept the metal buoyant, and underlying demand appears to be in good shape still on pull-backs," MKS PAMP said in a note.
"We look set for an imminent test above $2,000, but we feel there will be some good supply above there from the spec community (speculators)."
· Silver rose 0.1% to $17.05 per ounce, while platinum gained 0.4% to $932.64.
· The theme of December remains a sideways
consolidation. XAU/USD is challenging the 1480 resistance near the 50 SMA. However, the metal is trapped in a range between the 1455 and 1485 levels while remaining under the 50 and 100-day simple moving averages (DMAs).
· Gold remains under pressure while trading around $1,475 during Tuesday’s Asian session. The Bullion earlier benefited from the US Dollar (USD) weakness but fails to respond to the latest risk-off moves.
Technical Analysis
50-Day Simple Moving Average (DMA), around $1,478.50, limits the immediate upside of the yellow metal while a three-week-old ascending trend line near $1,464 can act as nearby support.
· Goldman Sachs has kept its 3, 6 and 12 month forecast for gold at $1,600 per troy ounces, saying investment demand will be supported by fears of recession and political uncertainty.
Gold has gained about 14% so far in 2019, on track for its biggest annual rise since 2010, but is down about 6% from a six-year peak of $1,557 an ounce in early September.
Goldman, in a note dated Dec. 6, attributed this fall to rising global risk appetite on an easing in U.S.-China trade tensions and a strong U.S. labor market.
However, “without a major growth acceleration, recession fears are likely to remain elevated supported by a low unemployment rate and an inverted yield curve,” it added.
Geopolitical uncertainty is already translating into greater gold demand, Goldman said, adding that 2019 will likely be a record year for global central bank (CB) buying with a target of 750 tonnes combined purchases.
“Next year, we see CB purchases slightly below 2019 but likely to remain elevated due to high geological uncertainty, a low level of rates globally and a low share of gold in a number of EM CB reserves.”
Reference: Reuter, FXStreet,Trading View
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