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Gold futures fell Friday after the final estimate of U.S. third-quarter GDP matched expectations with growth at 2.1%.
The yellow metal has been facing some headwinds from a U.S. economy that appears to be stabilizing as the U.S. and China make progress toward a partial trade pact, which has lifted stocks and knocked some of the luster off haven precious metals.
However, gold remains within range of a round-number level at $1,500, aided by some recent weakness in government bond yields, which compete with the metal for haven bids during times of uncertainty.
Lukman Otunuga, senior research analyst at FXTM said that the next key point of interest for gold will be around $1480. “A breakout above this level should open a path towards $1500. Alternatively, a breakdown below $1475 may inspire a decline towards $1470,” he wrote in a Friday research note.
Gold for February delivery GCG20, -0.25% on Comex pulled back $4.50, or 0.3%, at $1,479.9 an ounce, after climbing 0.6% on Thursday and hitting the highest finish for a most-active contract since Dec. 3, according to FactSet data. March silver SIH20, +0.21% tacked on 1 cent, or less than 0.1%, at $17.16 an ounce, adding to its 0.6% gain a day ago.
Silver is on pace for a weekly gain of almost 1%, while gold is trading nearly flat over the five-session stretch.
The U.S. government’s third and final reading of third-quarter gross domestic product showed frothier consumer spending than previously reported in the period running from July to September, but the increase in inventories also was marked down to leave GDP unchanged.
The data show that the U.S. economy has slowed this year after growth revved up in 2018 to a 13-year high, and investors expect the expansion could weaken in 2020, amid uncertainties around the continuing trade tensions with China, which could bolster bullion.
President Donald Trump on Friday said the signing of partial U.S.-China trade deal is being arranged after a “good talk” with President Xi, but doubts about details of the agreement has lent some support to prices of assets perceived as havens. Gold has traded in a range, while the 10-year Treasury note TMUBMUSD10Y, -0.27% has held below 2% at 1.92%, despite recent records for the Dow Jones Industrial Average DJIA, +0.39%, the S&P 500 index SPX, +0.53% and the Nasdaq Composite Index COMP, +0.41%.
Some market participants said uncertainty around the impeachment of President Donald Trump by the House late Wednesday was keeping gold prices buoyant.
“Traders are hesitant to go short in gold on Trump’s impeachment. There is an uncertainty on where the impeachment will move,” Chintan Karnani, chief market analyst at Insignia Consultants, told MarketWatch. “Gold is benefiting from uncertain U.S. political scenario.”
Expectations the Republican-controlled Senate will vote against removing Trump from office have insulated the market against any concerns thus far.
