This post was originally published on this site
Gold futures were struggling to hold on to gains in Wednesday trade, with investors focusing on progress on another U.S. fiscal package and a new round of guidance from the Federal Reserve, due at 2 p.m. Eastern.
No significant changes to policy are expected from the Fed but investors will be looking for any additional guidance on the central bank’s asset-buying program and will parse the latest round of economic forecasts, which could be catalytic for gold prices.
Over the past 24 hours, a quartet of key lawmakers from both parties met face-to-face to hammer out a coronavirus aid package, though the negotiations showed few clear signs of progress.
However, optimism for a deal and an accommodative Fed were helping limit the downside for bullion, holding prices near the 50-day moving average, currently at $1,874.99 an ounce, according to FactSet data.
A report on U.S. retail sales showed a drop of 1.1% in November and a reading for October was lowered as the resurgence of coronavirus cases took its toll on consumer activity.
“In terms of the gold price, the precious metal is holding on to its gains, and the hope is that it will continue to move higher,” wrote Naeem Aslam, chief market analyst at AvaTrade in a daily note.
“Today’s events are likely to set the precious metal tone for the rest of the year,” Aslam wrote, also noting that data on retail sales will be closely watched.
February gold GCG21, +0.15% was trading at $1,855.30 an ounce, nearly unchanged, following a 1.3% on Tuesday, marking the highest finish for a most-active contract since Dec. 8, FactSet data show. Prices closed 0.6% lower on Monday to hit the lowest settlement since Dec. 2.
Meanwhile, silver for March delivery SIH21, +2.07% was climbing 42 cents, or 1.7%, to reach $25.07 an ounce, after gold’s sister metal jumped 2.5% in the previous session.
Meanwhile European Commission President Ursula von der Leyen said on Wednesday that U.K. and European Union negotiators had “found a way forward on most issues” that remained the major stumbling blocks in their talks about a trade deal. Her comments lifted the British pound to its highest level since May 2018.
