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Gold futures traded lower on Wednesday, erasing what had been a gain for the week so far, as investors monitor rhetoric around U.S.-China trade talks and await the minutes of the Fed’s latest policy meeting.
Gold for December delivery GCZ19, -0.45% was off $6, or 0.4%, at $1,468.30 an ounce, with prices for the most-active contract trading about flat for the week to date. December silver SIZ19, -0.37% declined 5.8 cents, or 0.3%, to $17.06 an ounce.
The weaker tone for gold came despite a cooling of expectations around the U.S.-China talks after President Donald Trump said at a cabinet meeting on Tuesday that China needs to make a deal or he would further boost tariffs, with fresh levies set to take effect Dec. 15 that would have a direct impact on U.S. consumers.
The talks between the U.S. and China are in danger of hitting an impasse, threatening to derail the Trump administration’s plan for a limited “phase-one” pact this year, according to the Wall Street Journal, citing former administration officials and others.
But analysts said gold would likely benefit from haven flows in the event of a negative turn on trade talks.
“Gold’s allure is set to be restored amid growing doubts over a U.S.-China trade deal,” said Han Tan, market analyst at FXTM, in a note.
“Bullion is expected to end the year with its double-digit annual gain intact, even in the event of a signed limited U.S.-China trade deal. While not a base case for most investors at present, a complete breakdown in the current trade talks should send gold surging back above $1,500 while potentially paving the way for a global recession,” Tan said.
Minutes of the Fed’s October meeting are due at 2 p.m. Eastern, a half hour after the settlement for gold futures. The meeting saw the Fed deliver its third rate cut of 2019, with Chairman Jerome Powell subsequently signaling that policy was on hold.
In other metals trade, January platinum PLF20, +0.80% rose 0.9% to $920.90 an ounce, while December palladium PAZ19, +0.33% was up 0.2% at $1,740.70 an ounce.
December copper HGZ19, -0.04% lost 0.2% at $2.651 a pound.
