Investing.com - This week precious metal traders will closely monitor movements in the U.S. dollar, one of the biggest drivers for gold, with U.S.-China trade talks continuing in Washington and Federal Reserve minutes and U.S. economic reports on tap.
Both the U.S. and China reported progress in trade negotiations last week, but President Donald Trump said Friday that the talks were “very complicated" and that he might extend the March 1 deadline and keep tariffs on Chinese goods from rising.
U.S. duties on $200 billion worth of Chinese imports are set to rise from 10% to 25% if no deal is reached by the deadline.
The Fed on Wednesday is due to publish the minutes of its January meeting where its kept rates on hold and surprised markets by shifting to a more dovish stance on future rate hikes, citing subdued inflation and rising risks to global economic growth.
This week will also see speeches from a number of Fed officials, including New York Fed President John Williams and St. Louis Fed head James Bullard.
Market watchers will be looking ahead to Thursday’s durable goods report for an update on the health of the manufacturing sector, while a report on existing home sales the same day will give fresh insight into the housing sector, which lost momentum late last year amid higher interest rates and property prices.
Gold prices settled at the highest level in two weeks on Friday as indications of progress U.S.-China trade talks were seen as bullish for the yellow metal.
Gold futures ended up 0.83% at $1,324.75 on the Comex division of the New York Mercantile Exchange late Friday, after rising as high as $1,325.80 earlier.
While gold posted a small weekly gain, it was rangebound for most of the week, with gains on Friday stemmed by a rebound in stocks.
"Gold (price action) is like watching oil evaporate. The market is continually bearish at lows and bullish at highs with actual breaks infrequent," said Tai Wong, head of base and precious metals derivatives trading at BMO.
"The end of the (Fed) tightening cycle now looms which improves the overall backdrop for gold significantly. With the Fed on hold, there is less pressure for the rest of the globe to keep pace."
The metal gained 0.5% in the previous session after weak U.S. retail sales data added to concerns over slowing growth, which could prompt the Fed to hold interest rates steady for a while. Gold is highly sensitive to rising interest rates, as these increase the opportunity cost of holding non-yielding bullion.
"The world economy is slowing very rapidly and therefore monetary policy everywhere will be eased, so the outlook is a lot more inflationary, helping gold," said Alasdair Macleod, head of research at GoldMoney.com.
Elsewhere in metals trading, silver was up 1.46% to $15.75 a troy ounce, paring the week’s losses to 0.42%, for a second straight weekly decline.
Copper ended at $2.816, up 1.51% for the day but ended the week lower, snapping five weeks of gains.
Ahead of the coming week, Investing.com has compiled a list of significant events likely to affect the markets.
Monday, February 18
The U.K. is to publish industry data on house price inflation.
Financial markets in the U.S. will be closed for Washington’s Birthday, more widely known as President’s Day.
Tuesday, February 19
The Reserve Bank of Australia is to publish the minutes of its latest policy setting meeting.
The U.K. is to publish its monthly jobs report.
The ZEW Institute is to publish a report on German economic sentiment.
Wednesday, February 20
Australia is to publish data on the wage price index.
The Federal Reserve is to publish the minutes of its January rate setting meeting.
Thursday, February 21
Australia is to release its jobs report.
The euro zone is to release data on private sector business activity.
The European Central Bank is to publish its meeting minutes.
The U.S. is to release data on durable goods orders, jobless claims, existing home sales and manufacturing activity in the Philadelphia area.
Friday, February 22
The Ifo Institute is to publish a report on German business climate.
The euro zone is to release revised inflation data.
Canada is scheduled to produce data on retail sales.
ECB President Mario Draghi is to speak at an event in Bologna.
A number of Fed officials, including New York Fed President John Williams, St. Louis Fed head James Bullard and Fed Governors Randal Quarles and Richard Clarida are to speak at the U.S. Monetary Policy Forum, in New York.
-Reuters contributed to this report