The gold market is showing very little movement this morning which is surprising considering that trade dialogue from both sides of the negotiating table has continued to flow.

On one hand, China indicates that tariff rollbacks are a necessary component of a phase I deal but at the same time they are warning the US against meddling in their domestic affairs. It should be noted that the US House passed the Xinjiang Bill and that clearly meddles in Chinese affairs.

The US President, on the other hand, indicated the talks are at a "critical stage" and therefore there is no shortage of trade headlines but so far they have been countervailing. In an ongoing supportive storyline buyout/mergers continue in the gold mining industry with market analysts indicating the flurry of activity is at some of the highest levels since the turn-of-the-century.

In a minimally positive development, gold ETFs added 26,971 ounces to their holdings yesterday but net purchases this year remain below 10 million ounces. Silver ETF's reduced their holdings by 1.38 million ounces for the third straight day of declines.

While February gold reached up to the highest level since November 7th yesterday, the market was unable to hold that rally and at times prices traded more than $10 an ounce below the morning high in a fashion that undermines this week's initial bullish bias.

Furthermore, gold prices were not able to remain firmly bid in the wake of a series of disappointing US scheduled data points yesterday. In fact, we would have expected disappointing US data yesterday (particularly from the job sector) would have put the gold market into a fresh upward trajectory because of fresh concern of a soft monthly payroll report Friday.

Instead, safe haven interest was knocked down by the positive vibes being thrown off by equity market gains which in turn were inspired by unidentified Administration comments that a lack of urgency in trade talks should not be taken as a sign that the talks have stalled.

Adding into the disappointing condition for the bull camp this morning is the fact that the gold market has not been supported by a third bullish brokerage firm gold price forecast in the last 24 hours with the latest forecast projecting $1,600 gold pricing next year.

Another supportive development for gold earlier this week came from the Polish central bank governor's suggestion that his bank should increase their gold holdings as a percentage of total reserve holdings from 10% to 20% as that provided the second positive central bank gold story of the week.

In the short term, the ebb and flow of trade headlines will prompt two-sided volatility with temporary sideshows created by US scheduled data.

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