Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.6% to close above $1,481 after an announced Sino-US trade agreement left investors underwhelmed, lifting demand for safe-haven assets.

The US and China agreed in principle a so-called “phase one” deal that will cut tariffs on imports from China in exchange for the purchase of US agricultural products and some protections for intellectual property. While it has yet to be signed, the agreement prevents the new tariffs of 15% on $160 billion in Chinese good that are scheduled for December 15.

The Dow initially rose 130 points on the good news as traders cheered the apparent easing of the damaging 18-month trade war that has slowed global growth. But euphoria quickly gave way to skepticism as few details were forthcoming. Equity market quickly sold off while safe-haven asset and Treasurys rallied.

Soft retail sales data further damped risk appetite. Spending in stores and online in November was just 0.2%, raising concerns that GDP growth in Q4 will be weaker than hoped. Consumer spending accounts for around 70% of GDP and has almost single-handedly kept the US economy afloat this year as manufacturing and services have faltered.

The dollar fell 0.2% against major rivals led by the pound. The UK currency rallied after Boris Johnson established a convincing major in the recent elections, all but guaranteeing that Brexit will finally come about, ending many months of confusion and uncertainty. A weaker dollar supports gold and other commodities by making them less expensive overseas.

The other precious metals were mixed on the day but higher for the week. Silver rose 0.4% for a weekly gain of 2.5%. Platinum dropped 1.7% but still rose 3.3% this week. Palladium fell 1.2% today but added 2.5% this week.

At the Comex close: February gold gained $8.90 to $1,481.20; March silver rose 6 cents to $17.01; January platinum fell $16 to $928.80; and March palladium dropped $22.60 to $1,891.60 an ounce.