Gold Prices Up Amid Wobbly U.S. Dollar, Trade Deadline

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Dec 12, 2019 10:03 NY TimeKitco 10AM Silver Fix

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(Kitco, Thur. Dec. 12th) – Gold prices are moderately higher in early U.S. trading Thursday, supported by a slumping U.S. dollar index and some worries about an approaching deadline in the ongoing U.S.-China trade war. February gold futures were last up $6.50 an ounce at 1,481.40. March Comex silver prices were last up $0.106 at $16.96 an ounce. 

Asian and European stock indexes were mixed mostly firmer overnight. The U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. The marketplace is still digesting Wednesday’s conclusion of the FOMC meeting of the Federal Reserve, which saw no change in U.S. interest rates and a mostly upbeat assessment of the U.S. economy. The FOMC did tip its hand and say there were no rate-cut plans on the table for 2020 and implied that interest rates could remain stable for a prolonged period of time. The FOMC statement and comments from Fed Chairman Powell were deemed mostly neutral, but the gold and U.S. Treasury markets rallied, while the U.S. dollar index sold off and hit a five-week low in the aftermath of the FOMC statement Wednesday afternoon.

The European Central Bank is meeting today, headed up by new ECB President Christine Lagarde. No changes in ECB monetary policy are expected.

A general election in the U.K. today will help determine the course of Brexit and Prime Minister Boris Johnson’s conservative policies.

In other overnight news, China’s official Xinhua news agency said China will lower “funding costs” for the overall economy.

Euro zone industrial production in October was reported down 0.5% from September and down 2.2%, year-on-year. Those figures were a bit worse than expected.

The Sunday, Dec. 15 U.S. trade tariffs deadline on China’s imports is looming over the marketplace. While recent rhetoric from both sides has been mostly upbeat recently, traders know that the situation is still very fluid. Many markets are likely to be more tentative the rest of this week, knowing that a surprise could come this weekend. This is supportive for the safe-haven metals.

The key “outside markets” today see the U.S. dollar index firmer. Meantime, Nymex crude oil prices are higher and trading around $59.00 a barrel. 

U.S. economic data due for release Thursday includes the weekly jobless claims report and the producer price index.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com