Friday, 22 December 2017

What’s next? – GOLD 22.12.17

Posted by Olga Gorinina at 08:51


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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