Metals Stocks: Gold price rises as dovish central banks and U.K. elections lift metal

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Gold prices on Thursday traded higher for a third session in a row as uncertainties surrounding U.S.-China trade negotiations and a U.K. election helped to provide support for precious metal. Dovish stances by the Federal Reserve and the European Central Bank also helped to support bullion buying.

“Traders continue to price in diminishing expectations around an imminent phase one deal while the yellow metal received a flip from lower US yields after a less hawkish Fed policy retort,” wrote Stephen Innes, chief Asia market strategist at AxiTrader, in a daily research note.

The ECB earlier decided to keep its deposit rate at -0.5% and its asset purchase program unchanged at 20 billion euros a month. Christine Lagarde is holding her first press conference as ECB president.

Check out ECB Live blog: ECB press conference with Lagarde as president

Europe’s central bank moves follow the Fed, which on Wednesday kept interest rates on hold, as expected, at a range between 1.50% to 1.75% and signaled that interest rates would stay lower for longer. He said it would take a sustained increase in inflation to shift the interest rate trajectory higher.

That backdrop has helped to provide a lift to gold which has enjoyed a recent uptrend.

February gold GCG20, +0.86%  gained $11, or 0.8%, to $1,486 an ounce, putting the yellow metal on track to book its highest settlement since Nov. 6 amid three straight gains, according to FactSet data.

Among other metals, March silver SIH20, +1.34% added 19 cents, or 1.1%, at $17.040, after a 0.9% gain on Wednesday. The metal is on pace for its fourth consecutive gain.

Precious commodities like gold and silver also have benefited from U.S.-China trade tensions and doubts about the outcome of the U.K.’s general election on Thursday. Prime Minister Boris Johnson’s Conservative party leads in recent polling but his advantage over the rival Labour Party amid worries that the race between the Conservatives and the Labour Party has narrowed, casting some uncertainty on Britain’s plan to exit from the European Union.

Meanwhile, a Reuters report indicated that a much-hoped-for partial trade pact between Washington and Beijing isn’t close to coming to fruition, ahead of a Sunday deadline for an increase in some $160 billion in China goods.

Gold added to its gains after a weekly measure of those seeking unemployment benefits rose more than expected. Initial jobless claims jumped 49,000 to a seasonally adjusted 252,000 in the first week of December, the government said Thursday. That is the highest level since September 2017.

Separately, the producer-price index was unchanged last month, the government said Thursday, compared with economists’ consensus estimates polled by MarketWatch for a 0.2% increase.