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Gold Steady on Weak U.S. Services Data; Trump Speech Awaited

Gold Steady on Weak U.S. Services Data; Trump Speech Awaited

Investing.com – The State of the Union and what President Donald Trump tell Congress is giving a gold a bid even as the dollar retains its upward bias.

Fresh concerns about the U.S. economy after a back-to-back slump in durable goods orders and services sector data boosted the yellow metal in the spot market.

The contract, reflective of trades in physical bullion, rose by $2.77, or 0.2%, at $1,314.46 by 2:49 PM ET (19:49 GMT).

In , however, gold’s benchmark April contract on the Comex division of the New York Mercantile Exchange settled lower by a dime at $1,319.20 per ounce.

Investors turned toward gold to hedge against potential market eventualities from Trump’s 9:00 PM ET speech, which could touch on anything from trade negotiations with China to the spat with Democrats refusing to fund his border wall. The President has warned he might shut the government down again if he doesn’t get his wall or declare a national emergency to fund the wall and bypass Congress.

The Institute of Supply Management, meanwhile, reported a five-month low in U.S. services sector activity for January, missing consensus estimates and increasing worries of demand on a global scale. That followed through with data from Monday that showed an unexpected fall in new orders for U.S.-made goods in November, with sharp declines, particularly in demand for machinery and electrical equipment.

Gold has moved solidly above $1,300 over the past two weeks, but it has lost some steam since Friday as investors returned to the dollar, strengthened by the U.S. January jobs report that showed a solid growth of 304,000 jobs versus an estimated rise of 165,000.

Even White House economic adviser Kevin Hassett’s remarks on Monday that there was still “a lot of work to do” on the U.S.-China trade talks did not result in a bid for gold. Investors have been buying gold either as a hedge against a further U.S. fallout with China or a direct bet that a trade deal between the two countries would not happen.

But some analysts think gold still has a chance of advancing toward $1,350 if the Federal Reserve honors its promise to be patient with rate hikes.

Investors will be closely watching a number of Fed speeches this week for further clues on interest rates. Topping the list of the speakers will , who will come on Wednesday. Others from the central bank lined up to speak this week are Fed Vice Chair , Cleveland Fed President , St. Louis Fed President and Fed Governor .

The traded at $1,378 per ounce, up $12.95, or 1%, making it the world’s most valuable traded metal.

Spot palladium first traded above gold earlier this month when it hit record highs of $1,440.35 on Jan. 17. Gold’s own peaks have been higher in the past, rallying above $1,900 in 2011.

Trades in other Comex metals as of 2:49 PM ET:

up $15.60, or 1.2%, at $1,346 per ounce.

down 4.8 cents, or 0.3%, at $15.84 per ounce.

down $3, or 0.4%, at $827.35 per ounce.

up 2.2 cents, or 0.8%, at $2.82 per lb.

Source: Investing.com

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