Gold holds steady as US-China trade-talk hopes fades

Bengaluru — Gold prices held steady on Tuesday as optimism surrounding US-China trade negotiations faded, while investors awaited outcome of a crucial discussion that will determine how Britain will depart from the EU.

Spot gold rose 0.1% to $1,493.77 an  ounce as of 4.06am GMT. US gold futures also inched up 0.1% to $1,498.40 an ounce.

“Markets enjoyed a good risk-on rally, but on Monday news saying that China required more negotiation and talks before they find any deal, which is disappointing,” said Margaret Yang Yan, a market analyst at CMC Markets.

“Gold is in a consolidation phase, momentum is weak for a good rebound. The market is making lower highs and lower lows.”

A Bloomberg report on Monday, citing sources, said China wants more talks as soon as the end of October to hammer out the details of Trump’s phase one deal before Chinese President Xi Jinping agrees to sign it.

Sombre data from China reinforced the case for Beijing to unveil further stimulus as manufacturing cools on weak demand and US trade pressures. China’s factory gate prices declined at the fastest pace in more than three years in September.

Late on Friday, the US outlined the first phase of a trade deal and suspended this week’s scheduled tariff hikes on Chinese goods, but existing tariffs remained in place and officials on both sides said much more work was needed before an accord could be agreed.

Limiting gold’s gains, Asian stocks and Wall Street futures inched higher as some investors held out hope that Britain still had a chance to avoid a messy exit from the EU at negotiations this week.

Officials from Britain and the EU will meet at a make-or-break summit on Thursday and Friday that will determine whether Britain is headed for a no-deal Brexit.

The EU is considering a new emergency summit to get a Brexit deal, the BBC reported.

Among other precious metals, palladium was down 0.2% to $1,695.97 an ounce, after hitting a fresh record high of $1,720.97 in the previous session.

Silver inched up 0.3% to $17.70 an ounce and platinum was little changed at $893.02 an ounce.

Reuters