Commodities

Global gold prices slip as Trump says US-China close to trade deal

Updated : November 27, 2019 01:14 PM IST

Spot gold fell 0.2 percent to $1,458.69 per ounce by 0533 GMT.

Prices touched a two-week low of $1,450.30

US gold futures shed 0.1 percent to $1,458.40.

Global gold prices edged lower on Wednesday after US President Donald Trump's comments that Washington was close to an interim trade deal with China boosted demand for riskier assets.

Spot gold fell 0.2 percent to $1,458.69 per ounce by 0533 GMT. Prices touched a two-week low of $1,450.30 in the previous session. US gold futures shed 0.1 percent to $1,458.40.

Washington and Beijing are close to an agreement on the first phase of a trade deal, Trump said on Tuesday, after top negotiators from the two countries agreed to keep working on remaining issues.

"Everyone is very optimistic that there was a phone call between (US-China trade) negotiators," Ilya Spivak, a senior currency strategist at DailyFx said.

Asian shares ticked higher after Wall Street crawled to new record closing highs on positive trade news, while the dollar rose.

However, "at this stage, the markets are not going to have any significant response in terms of lasting follow through unless there is ink on paper or any kind of tangible development," Spivak said.

Investors were still wary that bills passed by the United States supporting anti-government protesters in Hong Kong will complicate negotiations.

On China's industrial front, data showed profits of firms fell to their steepest in 8 months in October. This comes after US consumer confidence fell for a fourth straight month in November.

Nonetheless, safe-haven bullion, which has gained more than 13 percent this year, mainly due to the tariff dispute, was little moved.

"If the US Federal Reserve has already signalled that they are not going to continue to cut interest rates as they have, then soft data means nothing for gold," Spivak added.

The central bank cut interest rates three times this year before pausing. Lower rates reduce the opportunity cost for holders of bullion, an asset that yields no interest.

"The safe haven asset, though indicating resilience, continues to face considerable headwinds as global risk appetites stay vigorous over positive signals in the US-China trade front," Phillip Futures analyst Benjamin Lu said in a note.

Spot gold may retest a support at $1,455 per ounce, a break below which could cause a fall into the range of $1,417-$1,440, according to Reuters technical analyst Wang Tao.

Market participants are now awaiting US GDP numbers for the third quarter and the Fed's Beige Book of the economic condition among other data due later in the day.

Elsewhere, silver fell 0.3 percent to $17.02 per ounce, palladium shed 0.3 percent to $1,804.02 per ounce and platinum was down 0.6 percent to $901.80.