Gold hovers below $1,490 as traders await news on US-China talks

Bengaluru — Gold prices eased on Thursday and held below the $1,490/oz level, as traders refrained from making any big bets in the absence of fresh developments on the Sino-US trade war front and Brexit negotiations.

Spot gold was down 0.1% at $1,488.35/oz by 4.02am GMT. US gold futures also slipped 0.1%, to $$1,492.10.

“Gold has broken multiple resistance levels in recent times and now we are seeing a correction taking place,” said Silver Bullion sales manager Vincent Tie.

“But weak data across the world has firmed concerns about a slowdown in the global economy, and that is providing some support to the safe-haven metal.”

US and Chinese trade negotiators were working on nailing down a Phase 1 deal text for their presidents to sign in November, US treasury secretary Steven Mnuchin said on Wednesday, but offered little details.

With no top-level meetings in sight, investors pondered how much longer the ugly trade spat, which has roiled financial markets around the world, will continue.

Investors are also in a wait-and-watch mode ahead of Brexit talks later in the session, which will determine how Britain will part with the EU.

Global stocks barely moved as soft US data raised concerns about the health of the US economy and risks of global recession, given consumption has been one of few remaining bright spots in the global economy.

US retail sales dropped for the first time in seven months in September, suggesting that manufacturing-led weakness could be spreading to the broader economy, keeping the door open for the Federal Reserve to cut interest rates again later in October.

OCBC said the October rate-cut fever may resume as global risk sentiments stay muted after disappointing retail sales numbers, which could prove to be a tipping point for the US economy.

Among other precious metals, palladium notched a record high of $1,782.60/oz, extending gains into a fourth session on supply concerns.

Meanwhile, silver fell 0.3% to $17.34/oz, while platinum inched 0.2% higher to $884.29/oz. 

Reuters