Gold Futures Market News and Commentary
Dec Comex gold (GCZ19) on Tuesday closed up +4.1 (+0.27%), and Sep silver (SIU19) closed up +0.208 (+1.23%). Metals prices moved higher Tuesday after increased trade tensions undercut stocks and boosted safe-haven demand for precious metals. Trade tensions rose after U.S. Secretary of State Pompeo said Tuesday that Huawei Technologies is not the only Chinese company that poses risks to the U.S. The yuan fell -0.14% Tuesday to 7.0605 yuan/USD, near last Tuesday's 11-1/4 year low of 7.0726 yuan/USD. Another positive for gold was Brexit concern after the EU on Tuesday rejected UK Prime Minister Johnson's demand to remove the Irish border backstop from the Brexit withdrawal agreement, thus increasing the chances of a no-deal Brexit on the Oct 31 deadline. Tuesday's economic data was mixed for metals. Eurozone June construction output rose by only +1.0% y/y, the slowest pace of increase in 5 months, which was dovish for ECB policy. However, the German July PPI rose +0.1% m/m and +1.1% y/y, slightly stronger than expectations of unch m/m and +1.0% y/y, which was slightly hawkish for ECB policy. Ongoing trade and geopolitical tensions, along with dovish central bank expectations, have sparked fund buying of precious metals as long gold positions in ETFs rose to a 6-1/4 year high Monday and long silver positions in ETFs rose to a new record high Monday.