Gold prices climbed on Wednesday, poised to post their first gain in five sessions, with uncertainty over the outlook for a U.S.-China trade deal and the first day of public impeachment proceedings against President Donald Trump helping to support haven demand for the precious metal.
“The combination of it getting beat up the past couple trading days and moving into oversold territory and short haven interest returning” provided support for gold, said James Hatzigiannis, senior strategist at Long Leaf Trading Group.
Investors also eyed developments in the House impeachment hearings.
Hatzigiannis, however, said he does not expect the impeachment process to affect gold trading. “If it goes through the Senate then we can start taking it serious,” he told MarketWatch.
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Gold for December delivery GCZ19, +0.56% on Comex rose $8, or 0.6%, to $1,461.70 an ounce, while December silver SIZ19, +1.10% was up 15.3 cents, or 0.9%, to $16.845 an ounce. Both metals posted losses in each of the last three trading sessions.
Investors also weighed Federal Reserve Chairman Jerome Powell testimony before Congress. Powell said interest rates are on hold absent a material deterioration of the economy. He reiterated that policy remained appropriate barring a material shift in the economic outlook.
Despite gold’s gains Wednesday, it “remains below the bottom of the $1,480-$1,560/oz range that had prevailed in recent months, which suggests more of a pause than a turn in sentiment at this point,” Colin Cieszynski, chief market strategist at SIA Wealth Management, told MarketWatch in emailed comments. “Things could change depending on what happens at the Congressional hearings.”
For now, “risk aversion is keener” following remarks made by Trump in a speech in New York Tuesday,” Jim Wyckoff, senior analyst at Kitco.com, wrote in a daily note. “The mercurial Trump appeared to suggest the U.S. is not so keen on removing its tariffs on Chinese imports.”
“However, “reports have said the Chinese are adamant that the U.S. tariffs must be removed to get a Phase 1 trade deal signed,” he explained. So “it should be not at all surprising that the marketplace’s perception of progress on the trade talks between the world’s two largest economies has down-ticked in recent days.”
Overall, “the trade talks’ progress or lack thereof has been a rollercoaster affair for the markets for many months,” said Wyckoff.
Gold and silver prices may also be seeing a safe-haven bid on Trump’s bashing of the Fed again in his remarks to economists in New York, he said. “Many feel Powell has and will continue to lean easy on U.S. monetary policy due in part to Trump’s berating of him and the Fed for not lowering interest rates more.” Lower interest rates may pressure the U.S. dollar and provide support for dollar-denominated gold prices.
Elsewhere on Comex, December copper HGZ19, -0.23% traded at $2.638 a pound, down 0.3%. January platinum PLF20, +0.40% rose 0.3% to $872.60 an ounce and December palladium PAZ19, +0.29% climbed 0.4% to $1,676.10 an ounce.