Gold futures are trading higher on Friday, putting the market in a position to turn higher for the week. This follows last week’s steep decline, which was the worst weekly performance in about two months. Prices are rising despite renewed optimism over global economic growth, following the signing of Phase One of the trade deal between the United States and China.
At 13:14 GMT, February Comex gold is trading $1569.60, up $10.20 or +0.66%. Last week, the market settled at $1560.10.
In another surprise, gold continued to firm even after global equity markets hit record highs after data showed China’s economy was stabilizing and the world’s second-largest economy ended 2019 on a somewhat firmer note as the trade truce revived business confidence.
In economic news, a higher contribution from energy costs boosted Euro Zone inflation in December, data showed on Friday, as the EU’s statistics office confirmed its earlier estimate that consumer prices grew 1.3% year-on-year in the last month of 2019.
Eurostat also confirmed its earlier estimate that month-on-month prices in the 19 countries sharing the Euro rose 0.3%.
On Friday, traders will get the opportunity to react to the latest data on U.S. Building Permits and Preliminary University of Michigan Consumer Sentiment.
Minor reports include Housing Starts, Capacity Utilization, Industrial Production and JOLTS Job Openings.
FOMC Members Harker and Quarles are also expected to speak. Harker’s speech could be a market-mover.
The price action suggests that gold traders are betting once again on a steep break in the stock market. They believe stocks are overpriced and setting up for a huge decline.
Furthermore, comments from Iran’s supreme leader Ayatollah Ali Khamenei are also reminding traders of the instability in the Middle East that could flare up at any time. On Friday, the Ayatollah called President Trump a “clown” who merely pretends to support Iranian citizens but would push a “poisonous dagger” into their backs.
He also described Tehran’s decision to attack military bases housing U.S. troops in Iraq earlier this month as a “day of God.”
This article was originally posted on FX Empire
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