Investing.com - There's no trade deal on the table yet, but the gold market's betting that President Donald Trump will at least suggest he has one down the road with China. And that was enough for the yellow metal to end a second-straight month in the green and stay above its key $1,200 perch.
Benchmark gold futures on New York's COMEX settled down $4.40, or 0.4%, at 1,226 per troy ounce on Friday. But for November, the market posted a nominal 0.5% gain, keeping up with October's advance of 1.6%.
"Today was all about end-of-month book squaring and expectations on what the G20 meeting betwen President Trump and China’s President Xi could bring," said George Gero, precious metals analyst with RBC Wealth Management in New York.
But there's no clear indication of what a U.S.-China trade agreement could do for gold.
Some analysts think it'll be good for physical demand of bullion in China as consumers there, spurred by a feel-good sentiment, could splurge on jewelry.
Others are betting gold will fall as a contrarian trade to equities, which are almost certain to ramp up on any sign of an end to the bitter acrimony between Washington and Beijing that has already led to hundreds of billions of dollars of duties imposed on bilateral trade.
Trump and Xi are due to meet over dinner on the sidelines of the Group of 20 summit in Buenos Aires on Saturday. U.S. trade representative Robert Lighthizer told reporters covering the G20 on Friday that he would be “very surprised” if the bilateral meeting “was not a success.”
Analysts were more circumspect.
"Does anyone think that an agreement on tariffs could be accomplished over a dinner and a glass of wine? Really?" Walter Pehowich, executive vice president at Dillon Gage Metals in Addison, Texas, wrote in his daily note on gold.
Even so, Pehowich said, knowing Trump, "he will tell the world that they have come to an agreement and, in turn, because they have to sort out their options over time (sort of work in process), he has decided not to start with a 25% tariff rate at the beginning of the year."
The U.S. president had previously warned that without a trade deal, he might boost existing tariffs to 25% from 10% on some $200 billion of Chinese goods, beginning Jan. 1.
Pehowich said many gold traders he had spoken with were ready to enter the gold market if prices could break beyond $1,232. Friday's session high came just shy of that at $1,231.
"If he (Trump) claims he has a deal, initially the gold market should catch a bid and trade through that level," Pehowich wrote. "But because of the anticipated rally in equities, I believe the $1,232 level will not be sustainable. If there is no deal at all, you could expect the price of gold to go through that level in lightning speed."