Gold may fall after hitting their highest in more than a week as stocks gained on better-than-expected China factory data and the greenback strengthened, despite fresh uncertainty over a US-China trade truce.
US President Donald Trump signed into law congressional legislation backing protesters in Hong Kong despite angry objections from Beijing, with which he is seeking a deal to end a damaging trade war.
Bullion prices, however, failed to stay afloat despite reports that a trade agreement between the United States and China was now "stalled because of Hong Kong legislation". China warned US that it would take "firm countermeasures" in response to the US legislation.
The dollar was flat even though data showing the US economy on a firm footing prompted investors to scale back rate-cut bets. US economic growth picked up slightly in the third quarter, rather than slowing as initially reported, amid a stronger pace of inventory accumulation and a less steep decline in business investment. The number of Americans filing applications for unemployment benefits fell last week, but the underlying trend suggested some softening in labour market conditions. New orders for key US-made capital goods increased by the most in nine months in October and shipments rebounded, suggesting some stabilization in business investment.
It is "essential" that the US Federal Reserve lift inflation to its 2 percent target over time in order to avoid the sort of "downward spiral" of low-interest rates and growth that central banks in Europe and Japan have struggled with, Fed Governor Lael Brainard said.
Gold may fall after hitting their highest in more than a week as stocks gained on better-than-expected China factory data and the greenback strengthened, despite fresh uncertainty over a US-China trade truce. The yellow metal could continue to stay under pressure although an actual trade deal is yet to be signed and sealed. And the recent bills passed by the United States supporting anti-government protesters in Hong Kong remain a point of contention between Washington and Beijing.
Additionally, although the US economy is showing resiliency, many sections of the world are still showing slow economic growth. Economic growth picked up slightly in the third quarter, weekly jobless claims fell, while new orders for key US-made capital goods increased. Manufacturing PMI from Euro-zone, Germany, UK & US will hit the market on Monday. Wednesday US will publish ADP employment change and ISM non-manufacturing PMI for November.
The market will also monitor OPEC meet which will begin Thursday onwards. Euro-zone Q3 GDP and US trade balance for October will be releasing on the same day. Most importantly, the US will release nonfarm payrolls for November on Friday which will drive the market further. Investors will be looking for clues on the strength of the US economy with ISM manufacturing and construction spending data due on Monday, while Friday brings the US jobs report. Overall, the sentiment in the bullion market will be bearish.
(The author is Fundamental Research Analyst - Commodities at Anand Rathi Share and Stock Brokers.)Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.