- Gold fails to benefit from UK election polls and doubts over the US-China trade deal.
- Traders turn cautious ahead of the FOMC.
- US CPI adds burden to market watchers, British election, trade headlines will dominate the Fed.
Gold prices register a mild loss of -0.05% while taking rounds to $1,463 during early Wednesday. The yellow metal seems to have lacked buying ahead of the key monetary policy meeting by the US Federal Reserve (Fed).
The Bullion struggles to justify worrisome polls concerning the United Kingdom’s (UK) election on December 12. The YouGov MRP poll now shows a close call of a hung parliament versus a clear majority for the ruling Conservatives Party during its previous release on November 27.
Also raising doubts on the metal’s pullback is looming uncertainty over the phase-one deal between the United States (US) and China. The recent comments from White House Adviser Peter Navarro mention that it's up to the Chinese as to whether to get a deal. The same follows White House Economic Adviser Larry Kudlow’s comments that the tariffs are still on the table.
Furthermore, the Asian Development Bank (ADB) recently cuts its growth view for China and other developing economies of Asia amid trade war fears. Though, Moody’s analysts say Sovereign credit quality in Australia, New Zealand, Korea, Singapore and Japan will remain strong in 2020.
The clues for the safe-haven’s recent declines can be traced to the US dollar’s (USD) recovery. The greenback seems to prepare for the final Federal Open Market Committee (FOMC) meeting of the year.
Even so, the risk tone stays sluggish with the US 10-year treasury yields being mostly unchanged near 1.83% whereas S&P 500 dropping 0.14% to 3,131 by the press time.
The market will now gear up for the key US Fed meeting with no expectations of another change announcement. However, economic forecasts and Chairman Jerome Powell’s press conference will be important to watch.
Technical Analysis
A gradual recovery between the four-week-old rising trend line and 100-day Simple Moving Average (SMA), $1,456 and $1,489 respectively, keeps the buyers hopeful.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.