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Gold edges up after Trump’s impeachment, as traders await details on China-U.S. trade pact

Gold futures climb on Thursday in the wake of President Donald Trump’s impeachment by the U.S. House of Representatives, but price moves are modest as benchmark bond yields push higher amid an easing of U.S.-China trade tensions.


“The gold market has lacked definitive direction this week as safe haven issues have been moderated at the same time that some signs of demand have surfaced, thereby limiting the market in both directions,” analysts at Zaner Metals wrote in daily note.


“Certainly, the potential for flight to quality buying from the U.S. impeachment remains in play, but it would appear to be unlikely that some surprising unforeseen bombshell will surface after the intense scrutiny of the past two weeks,” they said. “Therefore, that issue should begin to drift to the background.”


The Democratic Party controlled House impeached Trump late Wednesday on charges of abuse of power and obstruction, but the Senate is widely expected to acquit the president.


Gold for February delivery GCG20, +0.14%  on Comex edged up by $1.70, or 0.1%, at $1,480.40 an ounce, while March silver SIH20, +0.09%  shed nearly a cent, or 0.05%, to $17.04 an ounce. Both metals posted losses of 0.1% on Wednesday.


For the week, silver is on track for a weekly rise of 0.2%, while gold is on pace to retreat by less than 0.1%.


Some gold bulls say that bullion’s price has been kept afloat due to some lingering anxieties around a trade deal between Beijing and Washington which has been announced but hasn’t been signed by the parties yet.


“However, there’s still some caution in the markets, as indicated by gold prices holding steady since the news of the deal. There’s a sense of nervousness and impatience among investors as until the agreement has been signed and sealed, the risk that the deal could still fall through will persist,” wrote Raffi Boyadjian, senior investment analyst at brokerage XM.

The Chinese Ministry of Commerce said Thursday that it remains in contact with the U.S. as a text of a phase-one Sino-American deal is drafted.


Meanwhile, government bond yields gained, with the 10-year Treasury note TMUBMUSD10Y, +0.64% rising to 1.93% in Thursday dealings from 1.89% at the start of the week. Rising yields can undercut appetite for precious metals which don’t bear a coupon.


As gold futures have traded this week, U.S. stocks have mostly extended gains toward all-time highs, also eroding the appeal for haven assets compared against stocks.


In other metals trading, January platinum PLF20, +0.21%  was up 0.02% at $935.90 an ounce, while March palladium PAH20, +0.18%  headed 0.2% higher at $1,900.70 an ounce.

March copper HGH20, +0.21%  was up 0.2% at $2.8175 a pound.


MarketWatch - Published: Dec 19, 2019 10:05 a.m. ET - By MYRAP. SAEFONG & MARK DECAMBRE

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