Gold gained slightly higher as uncertainties of the U.S.-China trade relations ahead of the State of the Union Address of President Donald Trump intensifies. However, dollar slowdown and the global stock market is unaffected.
Spot Gold closed at 1:52 p.m. EST with an increase of about 0.21 percent to $1,314.47 per ounce. It came back from its weakest at $1,308.2 since Jan.29 during the last session. U.S. gold futures closed lower by $0.10 at $1,319.20 per ounce.
David Meger, director of metals trading at High Ridge Futures, said that they are waiting for more hard data on trade talks during the trade talks. He added that there are political concerns which remain and that probably adds to support for gold, along with the dovish U.S. Federal Reserve.
Last week, gold's gain reached its highest since April as it closed at $1,326.30 following the steady interest rates of the U.S. central bank and their announcement that they'll be more patient on further hikes amid a cloudy outlook for the economy brought by global growth concerns and the U.S. -China trade war. However, the Solid U.S. jobs data predicted that there will be an immediate slowdown in the economy of the United States. Cleveland Fed President Loretta Mester said on Monday that the central bank may need to increase U.S. interest rates if the economy does well. As a trend, Gold seems to be inversely proportional to the increase in interest rates.
The global stock market started with a progressive year which makes non-yielding bullion a less-attractive investment. The U.S. dollar which is currently at its more-than-a-week high is expected to reach its fourth straight sessions of gains.
The business leaders waited for hints during the President's address at 9:00 p.m. on Tuesday to make a clear judgment on business issues that may involve the U.S.- China trade relations and the political uncertainty of the nation over the U.S. president's proposed wall on the Mexican border.
According to Micealk Matousek, head trader at U.S. Global Investors, gold's one-week low on Monday reflected that some investors are preparing to come into the gold market before it takes off any higher. Analysts claim that the overall outlook for bullion remains positive.
Heraeus Precious Metals said in a client note that further market turbulence and confrontational politics could keep gold investors' sights. He added that Gold is expected to trade in a range between $1,225/oz and $1,450/oz, with the outlook broadly for further upside, though no doubt with some pull-backs with some pull-backs along the way.
