On Wednesday session, gold slightly gained (+ 0.3%), but at the same time remaining in the usual tight range, maintaining the sideway direction of movement.
The main reason for this range dynamic is seen in the fact that globally there are no news on the market that could seriously disrupt the balance that the market has reached. All the news that previously contributed to the development of the upward trend now seems mostly played. Here, among the main events, it is possible to note changes in American regulator future forecasts and plans to raise interest rates, which led to a local weakening of the dollar.
Trade negotiations between the United States and China, despite the positive expectations, have not yet yielded significant results. Now there is a small pause in the negotiations, as parties will develop and calculate options for their future actions. A new round of negotiations should begin only at the end of January.
The main newsmaker this week is United Kingdom, where country held two important votes in parliament. On Tuesday, the parliament rejected the Brexit plan proposed by Theresa May (for - 202, against - 432), on Wednesday a vote of no confidence in the Prime Minister did not pass as well (for - 306, against - 325). The uncertainty around Brexit is growing, which makes some investors prefer more safe assets, such as gold, but it’s obvious that for now this support is not enough to overcome an important psychological mark of $ 1,300.
And finally there is still high uncertainty in equities. Volatility has decreased, but investors can not decide on a further trend. Growth is seriously limited by the risks associated with the prospects of the world economy, on the other hand, the situation is not so bad yet that investors would resume large-scale sales in their portfolios. Moreover, there are still hopes for the successful conclusion of negotiations between the United States and China.
On this background, large changes in the gold market should not be expected. Boring tightening flat, most likely, will receive its continuation.
Today, the focus is on a large block of important statistics from the United States, FOMC member Quorls speech and events in the UK.