Gold prices steady on Friday, helped by a weaker dollar, with the possibility of a no-deal Brexit, uncertainties over U.S-China trade and fears of a global slowdown keeping bullion on track for a small weekly gain.
Spot gold was unchanged at $1,491.17 an ounce, but held a relatively tight range for most of the session. U.S. gold futures settled down $4.20 at $1,494.
“The dollar is a bit soft so (that) could help a little, but overall gold is meandering in no-man’s land. Perhaps we’ve found a restive equilibrium until we get a fresh macro driver,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
“The $1,380-$1,400 range ought to be a solid bottom for gold and $1,480-$1,520 seems really to be the equilibrium.”
Britain and the European Union sealed a new Brexit deal on Thursday, but whether that deal will be approved by the British parliament on Saturday is keeping markets on edge.
“Brexit is a coin flip at this point of time going into the weekend, we’re still waiting on the trade situation to see if they’re going to ink an actual partial deal,” said David Meger, director of metals trading at High Ridge Futures.
“The focal point today will be the Fed speak. We’re hoping to get any type of clue if there are any changes in the rate cut mentality at the end of this month. In recent days there have been discussions about a potential pause.”
The U.S. Federal Reserve is watching for signs that a global trade slowdown is having an impact in the United States beyond manufacturing and investment, but is not yet heading into a “full-fledged rate cutting cycle,” Dallas Federal Reserve President Robert Kaplan said.
In another sign the trade dispute is dragging on economic growth, data from China showed its third-quarter economic growth slowed to its weakest pace in almost three decades.
Source: Reuters
