AGE Daily Gold Update

AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.

11/14/2019: Gold rallies on data, trade worries

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rallied for a second day, rising 0.7% to close above $1,473, as soft global data and returning trade worries undercut stocks and the dollar, boosting demand for safe-haven assets.

China's economic slowdown deepened last month, with factory output falling more than expected and investment growth hitting a record low. Meanwhile, growth in Japan ground to halt in the third quarter, and Germany's GDP expanded by a meager 0.1%, barely avoiding recession.

With the world's largest economies facing headwinds intensified by trade conflicts, investors have been wagering heavily on hopes that the much-hyped "phase one" trade agreement between the US and China will be signed soon. This optimism helped to push all three major US stock indexes to record highs in recent weeks, pressuring gold and other safe havens.

But hopes for a trade pact are beginning to fade. China is refusing to commit to purchasing $50 billion in US farm products, a prerequisite for the Trump administration, while Washington is refusing to guarantee broad tariff reductions, a requirement for Beijing.

US and global equity markets slipped today as the soft data and returning trade worries blunted risk appetite. US Treasurys rallied alongside gold on flights to safety, pushing down yields.

The dollar fell 0.3% against major rivals led by safe-haven currencies like the yen and Swiss franc. A weaker dollar supports gold and other commodities priced in it for global trade by making them less expensive in other currencies.

In his second day of Congressional testimony on monetary policy, Fed Chair Jerome Powell said trade-related weakness in the manufacturing sector has yet to spill over into the broader economy. He suggested that a recession is unlikely, and interest rates should remain where they are absent deteriorating data.

Separately, St. Louis Fed President James Bullard warned that a "sharper-than-expected slowdown could materialize" in coming quarters, and that trade uncertainty could last "for years."

The other precious metals were also higher, with silver adding 0.7% while platinum and palladium rose 0.9% and 1.6%, respectively.

At the Comex close: December gold gained $10.10 to $1,473.40; December silver added 12 cents, to $17.03; January platinum rose $8 to $882.80; and December palladium climbed $27 to $1,702.10 an ounce.