Gold supported over lacklustre economic data

SOFTER geopolitical overtones from a preliminary US-China trade deal and signs of progress in the EU-UK divorce deal has limited upside gains for safe haven assets. Lacklustre global economic data has kept global risk appetites measured however, as investors deliberate looming downside risks. The world's second largest economy has indicated growing signs of weakness as Chinese GDP results (3Q) declined to the lowest in 27 years (6 per cent). Gold prices, though softening from six-year highs, will stay vigorous over mounting economic challenges and geopolitical uncertainties in the current term.

What should investors look out for in the longer term?

Weaker-than-expected economic releases have capped bullish gains for riskier assets as investors contemplate mounting economic challenges (4Q). A lack of clarity in the US-China partial trade deal along with political friction between both countries will keep bullion appeal strong over looming market uncertainties. The US Federal Reserve is widely expected to cut interest rates by 25 bps to support economic expansionary activities amid growing market risks. Gold prices, though cooling off from a strong bullish momentum in 3Q, will retain strength over subdued global growth and monetary policy-easing programmes by global central banks.