Friday, 22 December 2017
What’s next? – GOLD 22.12.17
Gold futures traded lower in early trading
hours on Friday, as market participants turned their heads to fresh economic
reports as the tax reform has been digested.
On the Comex division of the New York
Mercantile Exchange, gold futures were down 0.09 percent at $1.269.40 a troy
ounce as of 05:05 GMT.
The yellow metal reached a two-week peak on
Thursday, as the dollar extended loses on the back of a smaller-than-expected
US economic expansion for the third quarter.
In late trading hours, gold futures for
February were nearly 0.08 percent higher at $1,270.60.
The world’s first economy expanded at a 3.2
percent year-over-year rate in the third quarter of this year, data from the
Commerce Department showed.
Market analysts had forecasted a 3.3 percent
increase in the gross domestic product, above a 3.1 percent seen in the second
quarter, which was the fastest build since Q1 2015.
Weaker-than-expected economic data and a mixed
sentiment regarding the Republican tax reform bill continued to pressure demand
for the American currency.
The US dollar index, which measures the
greenback against six major currencies, was trading 0.14 percent higher at
93.00 by the time of this writing.
Despite downbeat data, economists have pointed
out that the economy remains on a positive note for the Federal Reserve and the
latest report will not weigh on further monetary decisions.
Gold is very sensitive to interest rate moves
in the US. Higher rates dampen demand for safe havens as they lift the
opportunity cost of holding non-yielding assets.
Earlier this week, Goldman Sachs issued a
forecast saying the precious metal would fall back to $1,200 per ounce by
mid-2018 as tax changes are made and Fed’s head finally changes.
Ahead in the European session, market players
will be focusing on the releases of UK Q3 business investment, current account
and gross domestic product as of 09:30 GMT.
In the United States, attention will be
directed to durable goods orders and personal spending for November as of 13:30
GMT, while Michigan University’s consumer expectations and sentiment will be
out at 15:00 GMT. New home sales are up at the same time.
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