Investing.com - Gold prices wavered around the unchanged mark in morning trade on Thursday, shrugging off a more moderate tone on trade from China, as signs of demand for the precious metal remained solid and U.S. economic growth slowed as expected.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange, edged down $1.35, or 0.1%, to $1,547.75 a troy ounce by 9:48 AM ET (13:48 GMT).
China’s Ministry of Commerce confirmed that Beijing and Washington were working on setting up a trade meeting in September and spread the message that the world’s second-largest economy was looking to de-escalate recent tensions caused by the tit-for-tat tariff war.
Ed Moya, market analyst at Oanda, blamed gold’s weakness on those “assuaging comments,” but said the conciliatory messages should be expected in the lead up to a face-to-face meeting.
“However, with the risks of everything falling apart with a single tweet, we will likely see any gold selloffs be bought up. U.S. stock market volatility, negative global rates falling further into the abyss and geopolitical risks are going to keep both gold and silver firmly supported in the short term,” Moya said in a note.
Those factors have all contributed to a rally in gold, up 8% in August and 18% so far this year, while demand for the precious metal continues to build.
John Reade, chief market strategist at the World Gold Council, said that gold exchange-traded funds saw a further 9 tonnes of inflows on Wednesday.
“Barring a large reversal in the last couple of days of the month, August will cap three months of decent inflows into gold held by ETFs,” he tweeted.
U.S. GDP data for the second quarter was revised as expected to a slightly lower 2%, causing no reaction in gold prices.
The Federal Reserve is widely expected to cut rates by 25 basis points in September in order to support the economy in the face of trade uncertainty.
Even so, Fed policymakers once again showed signs of uncertainty with San Francisco Fed President Mary Daly arguing for further accommodation even if the U.S. economy runs hot, while Richmond Fed chief Thomas Barkin admitted that he was still undecided on the what the central bank’s next move should be.
The Fed was divided in July over what to do with interest rates, with two members voting against a cut, while a couple favored lowering them more aggressively than the quarter-point reduction that was ultimately approved.
U.S. President Donald Trump took the opportunity to once again attack the Fed on Thursday via his Twitter account.
“The Economy is doing GREAT, with tremendous upside potential! If the Fed would do what they should, we are a Rocket upward!” he said.
Trump has repeatedly called for the Fed to pursue a more aggressive path of policy easing.
In other metals trading, silver futures gained 0.8% to $18.598 a troy ounce by 9:49 AM ET (13:49 GMT).
Palladium futures traded up 1.3% to $1,481.05 an ounce, while sister metal platinum rose 2.3% to $929.50.
In base metals, copper advanced 1.0% to $2.590 a pound.