• Gold rose on Monday, helped by a weaker dollar on expectations that the U.S. Federal Reserve might apply brakes on its monetary tightening cycle in2019, although an improved risk appetite limited gains for the safe haven metal.
Spot gold was up 0.3 percent at $1,288.60 per ounce, as of 0306 GMT and U.S. gold futures gained about 0.4 percent to $1,290.70 per ounce.
• "The dollar is weak, aiding gold. Also, Jerome Powell's views on Friday about the future of interest rate hikes is a bullish factor for gold," said Yuichi Ikemizu, Tokyo branch manager, ICBC Standard Bank.
U.S. Fed chairman Jerome Powell said on Friday that he was aware of the risks related to an economic slowdown and would be patient and flexible in policy decisions this year.
• "Gold prices will be going higher in due time because of the Fed comments. Maybe, people have already started buying," Ikemizu said.
• The dollar index, which tracks the U.S. currency against six major peers, fell 0.2 percent.
• Investors had expected the Fed to stay on its tightening path after three hikes last year, but the ongoing trade war and recent disappointing corporate earnings have put those expectations to rest.
• "Given the uncertain financial market climate, gold should continue to flourish, and for those that have missed the boat, pullbacks could be an excellent opportunity to engage," Stephen Innes, APAC trading head at OANDA in Singapore, said in a note.
"But in the unlikely case that stock markets start to draw more affection from investors, gold could struggle over the near term to regain momentum and prices could slip aggressively."
A relief rally in Asian equities triggered by the Fed's dovish stance and strong U.S. jobs data limited the yellow metal's upward momentum.
• Meanwhile, markets were closely watching trade negotiations between Washington and Beijing starting later today.
• U.S. President Donald Trump said on Friday that China's weakening economic growth puts the United States in a strong position as negotiators, increasing investors optimism for a probable trade deal between the world's two largest economies.
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Twenty market professionals took part in the Wall Street survey. There were 11 votes, or 55%, calling for gold prices to rise. Six voters, or 30%, look for gold to fall, while three, or 15%, see the metal sideways or else are neutral.
Meanwhile, Main Street was the most bullish on gold than it has been in since April, with the 706 respondents in an online poll the most since mid-August. A total of 544 voters, or 77%, called for gold to rise, the most significant bullish percentage since 84% back on April 12. Another 101, or 14%, predicted gold would fall. The remaining 61 voters, or 9%, see a sideways market.
We still like it [gold] up,” said Phil Flynn, senior market analyst with at Price Futures Group. “The bad manufacturing data in the U.S. [December purchasing managers index] may cause the Fed to pause despite strong jobs as further interest-rate hikes look to be on hold. It should keep gold in its upward trend.”
Kevin Grady, president of Phoenix Futures and Options, said the strong jobs gains do not deter him from looking for higher gold prices.
“I remain bullish here,” Grady said. “Gold is currently under pressure because the market is viewing the strong nonfarm payroll number as a potential sign of a rate hike in 2019. I totally disagree. This is one number, and I still believe that we are looking at zero to one potential hike in 2019. The geopolitical situation (Brexit, tariffs) has not changed and the government shutdown does not appear to be close to an end.”
• Spot palladium, meanwhile — which broke through $1,300 on Friday to hit its highest on record at $1,310 per ounce — eased slightly, but was still trading at a slight premium to gold.
• Among other precious metals, palladium was down 0.3 percent at $1,296.99 per ounce.
• Silver was up 0.5 percent at $15.77 per ounce, while platinum gained 0.1 percent to $823.40.
Reference: Reuters
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