1 month ago
Commodities

Gold Prices Inch Higher Ahead of State of the Union Address

Investing.com - Gold prices inched higher on Tuesday, as market players looked ahead to a key speech from President Donald

Investing.com - Gold prices inched higher on Tuesday, as market players looked ahead to a key speech from President Donald Trump.

Comex gold futures were at $1,320.65 a troy ounce by 8:50AM ET (13:50 GMT), up $1.45, or around 0.1%.

Meanwhile, spot gold was trading at $1,316.30 per ounce, up $4.70, or 0.35%. It hit a one-week low of $1,308.72 in the prior session amid improved appetite for riskier assets, such as stocks.

President Donald Trump will make his annual State of the Union address to Congress at 9:00PM ET. Market participants will be watching for any sign of renewed conflict over the federal budget that could spark a renewed bout of risk aversion and push gold higher.

Trump signaled last week that the speech will include extensive remarks about his standoff with Democrats over building a wall along the U.S.-Mexico border, the subject of an intense partisan battle that prompted a 35-day partial government shutdown.

"The speech is going to be closely monitored, for an update on trade talks with China and border security, or more specifically the border wall," Craig Erlam, senior market analyst at Oanda in London, wrote in a note.

"There have been plenty of reports that Trump is considering using emergency powers to deliver on his promise of border wall funding and this could be the platform for it," Erlam added.

Meanwhile, market players will keep an eye out on the Institute for Supply Management’s (ISM) survey on U.S. service sector activity to gauge the strength of the economy.

The survey, due for release at 10:00AM ET (15:00 GMT), is forecast to inch down to 57.0 in January from the previous month's reading of 58.0.

Federal Reserve Chairman Jerome Powell dined Monday night with Trump and Treasury Secretary Steven Mnuchin, the central bank said in a statement.

The Fed said in a statement afterwards that Powell reiterated that "the path of policy will depend entirely on incoming economic information."

The U.S. central bank last week signaled that its three-year drive to tighten monetary policy is close to an end due to rising headwinds to the economy. That led bond yields to fall, reducing the relative attractiveness of bonds to gold. However, yields have since rebounded in the wake of a positive U.S. jobs report on Friday.

In other metals trading, silver futures ticked up 1.6 cents, or about 0.1%, to trade at $15.90 a troy ounce.

Palladium futures gained 0.85% to $1,341.75.

Platinum was up roughly 0.4% at $826.20.

-- Reuters contributed to this report