· Gold slipped on Thursday, as the safe-haven metal was hurt by upbeat U.S. economic data that signalled a healthy economy, and as stock markets climbed on optimism brought about by the signing of the U.S.-China Phase 1 trade deal.
· Spot gold fell 0.3% to $1,551.63 per ounce. U.S. gold futures were down 0.14% at $1,551.9.
· “Gold is softer right now on stronger equities, and as the geopolitical front is also getting a little quiet when it comes to China and Iran issues,” said Bob Haberkorn, senior market strategist at RJO Futures.
· World stocks held near record highs, while the dollar index erased earlier losses after multiple data releases painted a positive U.S. economic picture.
· U.S. retail sales rose for a third straight month in December and a U.S. Mid-Atlantic manufacturing activity gauge revived to its highest in eight months.
· U.S. holiday sales rose 4.1% in 2019 from a year earlier, as steady wage and jobs growth encouraged shoppers to splurge on groceries, beverages and furniture, the National Retail Federation said.
· The much-awaited Phase 1 trade deal was signed by U.S. President Donald Trump and Chinese Vice Premier Liu He on Wednesday, defusing an 18-month-long row that roiled global markets.
· Analysts noted the deal fails to address structural economic issues, does not fully eliminate the tariffs, and sets hard-to-achieve purchase targets, leaving a number of sore spots unresolved.
· Credit Suisse: gold to 'perform well' in 2020
Credit Suisse looks for gold to “perform well” in 2020, although the Swiss bank doesn’t look for quarterly average prices to stray far from current levels.
Among mining stocks, the bank looks for the best performers to be companies that can generate free cash flow and return capital to shareholders.
In an outlook report released late Wednesday, analysts said they look for the precious metal to average around $1,540 an ounce this year, peaking at $1,560 in the first quarter and then gradually easing to $1,525 by year-end. As of 10:38 a.m. EST, spot metal was at $1,549.60 an ounce.
Despite near-term optimism about global stocks by investors, Credit Suisse said it anticipates a mostly “risk-off skew” due to continued uncertainty about the U.S.-China trade war, Brexit, and lingering fears of a global economic slowdown or recession.
“This uncertainty is leading to most central banks around the world cutting rates, which is supportive of gold prices (lower yields lead to higher gold),” Credit Suisse said. “In the U.S., the Fed has indicated a pause in rate cuts, but this stance could change quickly, as we saw last year, if economic fundamentals weaken.”
· Technically, February gold futures bulls have the overall near-term technical advantage as a two-month-old price uptrend in still place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the September high of $1,571.70. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,525.00. First resistance is seen at today’s high of $1,558.20 and then at this week’s high of $1,563.10. First support is seen at Wednesday’s low of $1,546.50 and then at 1,541.00. Wyckoff's Market Rating: 6.5.
· Elsewhere, palladium gained 1% to $2,285.18 an ounce, after hitting a record peak of $2,395.14 earlier in the session.
· “It’s such a small, tight market that when someone takes a big lump of supply out in the short term the market can become completely ruptured”, said Tai Wong, head of base and precious metals derivatives trading at BMO.
“I’d be surprised if we don’t see a correction sometime in the next week or so.”
· Platinum dipped 1.6% to $1,004.02, having hit its highest since February 2017 at $1,041.05.
Both platinum and palladium are primarily used by automakers for catalytic converter manufacturing to clean car exhaust fumes.
· Silver fell 0.2% to $17.95 per ounce.
Reference: CNBC, Kitco
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