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Gold dips in Crimped Holiday Trading; Solid Support Still at $1,475



Investing.com – The holiday tingle is spreading across markets, paring activity as traders focus on preserving gains rather than extending them. Gold is no exception, losing some momentum on Wednesday after sticking steadfastly to the $1,480 target in recent sessions.

for February delivery on New York’s COMEX settled down $1.90, or 0.1%, at $1,478.70 per ounce.

, which tracks live trades in bullion, slipped $1.14, or 0.1%, to $1,475.06 by 2:00 PM ET (19:00 GMT).

Wednesday’s decline was only the third in seven days for gold, which had risen by a net $10 in that stretch. Gold is up about 0.4% both for the month and the fourth quarter and 15.4% on the year.

The gain was barely a drop in the bucket for a market that saw daily upward moves of $30 per ounce or more earlier this year as it charted $1,500 highs. Yet, it helped form a strong support base for gold at $1,475 amid anemic holiday volumes.

“For precious metals, the inflation theme is making a comeback. We reiterate that the gold bug ain’t dead, and the Fed’s asymmetric reaction function is a key factor keeping it alive,” TD Securities said in a note about gold.

Last month, the Federal Reserve ended its rate-cut cycle for 2019 after three straight reductions of a quarter percentage point. Fed Chairman Jay Powell has since expressed a desire to see greater inflation growth in order to continue easing.

“The Fed Chair is looking for a ‘persistent and significant’ increase in inflation before putting hikes on the table — which will ultimately suppress real rates further and provide a tailwind for gold in 2020,” TD Securities added.

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“This lends strength to the view that gold’s rally is young and is prone to continue through the New Year.”

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