Gold prices stabilised in the second half of the week, holding above the $2,020 an ounce level on Thursday.
Prices moved in a relatively narrow range of $2,020 to $2,040 an ounce on Thursday, showing a moderate rise in prices compared to Wednesday’s action.
The more stable conditions followed a surge higher to an all-time high of over $2,100 an ounce at the start of the week. Initial fears over a possible escalation in the conflict in the Middle East appeared to ease by mid-week, albeit with the market still on edge while hostilities continue between Israel and Palestine. Gold prices have undoubtedly taken a step higher in the wake of heightened geopolitical risks, due to the metal’s appeal as a safe haven asset during times of uncertainty.
Meanwhile, the markets continue to weigh the prospects of interest rate changes by central banks, with any cuts in the base rate next year seen as supportive for gold prices. The day-to-day release of economic indicators is playing into expectations of monetary policy changes by the major economies.
China’s trade surplus increased to US$68.39 billion in November as exports unexpectedly grew, surpassing forecasts of US$58 billion, according to figures released Thursday. The figures suggest China’s economy may be faring better than expected, which points toward greater demand for high-risk assets, such as equities, and lower demand for safe havens like gold.
That said, more of the market’s focus is likely to be on the monthly US Non-Farm Payrolls figures due out Friday for a pulse check on America’s economy, and therefore an indicator for future interest rate changes.
Carlo is an external market analyst for Kinesis Money. With a credential background in Economic Finance and International Exchange (MA), Carlo’s critical analysis of gold and silver markets’ performance is frequently quoted by leading publications such as Forbes, Reuters, CNBC, and Nasdaq.
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