Precious Metals Weekly Review

SP Futures according to Investing.com (November 18, 2019) - Despite the broad appetite for risk, gold’s downside was still limited Friday by some investors’ thinking that the trade deal might be some way off.

Chinese media, on Friday fleshed out arguments that Chinese demand for U.S. farm products is nowhere near the level of purchases that Washington is insisting on in order to seal a partial 'phase-1' deal.

“For investors, the impetus to buy gold as opposed to stocks is increasingly hard to justify with US equities printing new all-time highs, making loss-aversion a tough sell,” analysts at TD Securities said in a note.“But as yields have also begun to creep lower holding onto the downtrend formed by the end of the hiking cycle precious metals prices have remained resilient, despite being at a risky juncture with the Fed now on pause.”

Gold futures for December delivery on New York’s COMEX settled at $1,468.50 per ounce, down 0.3% on the day but up 0.4% on the week.Spot gold, which tracks live trades in bullion, saw a final trade of $1,467.86 in New York on Friday, down 0.1% on the day but up 0.6% on the week.

Gold fell off the bullish $1,500 perch early this month after Federal Reserve Chair Jay Powell suggested that the U.S. central bank’s third straight rate cut of a quarter point in October would be its last for the year.

TD Securities said while gold funds may have liquidated some of their long holdings in the yellow metal, “the bar is high for machines to add further selling pressure, and aggregate open interest still sits at all time highs.”“Our estimated breakeven entry point for the bulls stands in the $1440/oz range, which suggests that a break below that range would be required for prices to be dragged lower by a decline in open interest. We contend that the pain trade is still to the downside in the near-term.”