Gold Eases As Positive Trade News Boosts Risk Sentiment

Published date: .

Reuters|

Nov 07, 2019, 03.40 PM IST

BCCL

Gold
Spot gold fell 0.2 per cent at $1,487.27 per ounce, as of 0831 GMT.

Gold inched down on Thursday, losing some of its safe-haven appeal after China said that it had agreed with the United States in the past two weeks to a phased cancellation of the additional tariffs imposed during their months-long trade war.

Spot gold fell 0.2 per cent at $1,487.27 per ounce, as of 0831 GMT, while US gold futures were down 0.3 per cent at $1,488.3 per ounce.

"If we see the trade talks go further in a positive direction, we will see more pressure on gold," said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.

"If prices fall below $1,480 an ounce, we will see a fresh low at $1,465."

On Wednesday, a senior official of the Trump administration told Reuters that a meeting between US and Chinese leaders to sign an interim trade deal could be delayed until December as discussions continue over both the terms and the venue.

The tit-for-tat tariff war between the world's two biggest economies for the past 16 months have roiled financial markets and raised fears of a global economic slowdown, helping the safe-haven bullion rise nearly 16 per cent this year.

"Sentiments are that some kind of deal will get done, also the Federal Reserve has said that it is not looking to do anything more this year (with interest rates)" and that is why gold's reaction has been relatively muted, said Brian Lan of Singapore dealer GoldSilver Central.

Last month, the Fed cut interest rates for the third time this year to help sustain US growth despite a slowdown in other parts of the world, but signalled there would be no further reductions unless the economy takes a turn for the worse.

Lower interest rates reduces the opportunity cost for holding the non-yielding gold.

Gold will trade in a range of $1,482-$1,518 an ounce in the short term, Lan said.

Among the other precious metals, silver dipped 0.3 per cent to $17.57 per ounce. Platinum rose 0.3 per cent at $931.51 per ounce, while palladium rose 0.5 per cent to $1,800.87 per ounce.



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