Gold spent the past week consolidating within a narrow range, shrugging off the impeachment of President Trump and still looking for clarity on the U.S./Sino trade deal. While the yellow metal looks poised to close higher on the week, it was one of the least exciting weeks we've seen in quite some time.
Spot Gold Daily Chart
The impeachment was a nonevent because markets had priced in a party-line vote on the matter. While the failure of House Democrats to deliver the articles of impeachment to the Senate is an unexpected twist, I still don't think anyone believes there is a realistic scenario where the President gets removed from office.
On the trade front, positive news continues to trickle out, although plenty of skeptics remain. President Trump tweeted on Friday that he had a "very good talk" with President Xi of China and that they have already started "large scale" purchases of U.S. ag products. He went on to add that, formal signing of the agreement is "being arranged."
The stock market sure seems to be optimistic on trade, but despite the 'risk-on' environment, gold and silver continue to hold up well. In fact, silver pushed to a 2-week high on Friday. When I'm leaning toward the bullish side, negative action in the gold/silver ratio always makes me feel better!
Palladium corrected sharply on Friday – dropping more than 5% – as traders squared positions ahead of the weekend and the holiday week ahead. In a thinly traded market like palladium, this level of volatility is not overly concerning. The underlying fundamentals remain bullish, as does the underlying trend.
Platinum got dragged lower as well, leaving the white metal confined to the range that was established in November. Here the underlying fundamentals remain bearish as the only way to address the supply deficit in palladium is to mine more platinum, which only adds to the supply surplus in Pt.
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