Gold slides as trade deal hopes lift risk appetite

Get real time updates directly on you device, subscribe now.

Gold slides as trade deal hopes lift risk appetite

Gold dipped to a more than five-week low on Monday as optimism around a possible trade deal between the United States and China helped whet risk appetite, while platinum shed 3 percent.

The world’s two largest economies appear close to striking a deal that would roll back US tariffs on at least $200 billion worth of Chinese goods and possibly end their long-drawn trade spat.

Spot gold was down 0.7 percent at $1,284.10 per ounce by 9:44 a.m. EST (1444 GMT), having touched $1,282.5 earlier in the session, its lowest since January 25.

The precious metal slipped below a key level of $1,300 on Friday.

Meanwhile, US gold futures shed 1.1 percent to $1,285.1 per ounce, set to fall for a sixth consecutive session.

“There is a risk-on (sentiment) in the markets with the positive US-China talk, so gold is naturally pulling back on strong equities, strong dollar and good geopolitical news,” said Bob Haberkorn, senior market strategist at RJO Futures.

US President Donald Trump and Chinese President Xi Jinping could reach a formal trade deal at a summit around March 27 given progress in talks between the two countries, the Wall Street Journal reported on Sunday.

Global markets cheered the news, indicating improved demand for riskier assets, in turn dampening demand for gold.

The dollar index against a basket of other currencies was at a 10-day high, with rising US Treasury yields translating into more demand for the currency.

“It seems that investors’ appetite for gold has suddenly vanished,” ActivTrades chief analyst Carlo Alberto De Casa said in a note. “From a technical point of view, the fall below $1,300 is making space for further declines.

Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 1.50 percent on Friday, their biggest one-day percentage fall since December 2016.

Amongst other precious metals, platinum shed 3 percent to $832.67 an ounce.

Palladium was down 0.5 percent at $1,538.03.

However, Bank of America Merrill Lynch lifted its forecast for palladium, expecting it to hit a key $2,000 this year. The bank said it expects platinum prices to average $883 for the same period.

Earlier in the session, palladium rose to $1,560, within striking distance of an all-time peak of $1,565.09 scaled on Feb. 26 due to a sustained deficit for the autocatalyst metal.

Silver declined to an over two-month low at $15.07 an ounce, and was trading 0.6 percent lower at $15.13.

Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.

2019-03-04 23:26:50

Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.

Get real time updates directly on you device, subscribe now.

Comments
Loading...

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More