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PRECIOUS-Gold rises as trade deal doubts pressure equities

Published 14/11/2019, 05:56 am
© Reuters.  PRECIOUS-Gold rises as trade deal doubts pressure equities
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(Updates prices)

* Platinum rises after four losing sessions

* "Sustained expansion" ahead for U.S. economy: Powell

* U.S. October consumer prices rise 0.4%, more than expected

By Asha Sistla

Nov 13 (Reuters) - Gold gained on Wednesday as U.S. President Donald Trump's speech on the trade ties with China diminished optimism for a deal and dented risk appetite.

Spot gold XAU= rose 0.4% to $1,462.03 per ounce as of 1:36 p.m. EST (1836 GMT). U.S. gold futures GCcv1 settled up 0.7% at $1,463.30.

"President Trump talked about raising tariffs eventually if there is no resolution or any deal on phase one and that seems to be enticing buyers to gold," said Michael Matousek, head trader at U.S. Global Investors.

"Over the longer term, as an investment it (gold) is still the safe haven. People still want to own it. The overall trend is still up."

Trump on Tuesday said a trade deal was close but gave no details on when or where an agreement would be signed, disappointing investors in what was billed as a major speech on his administration's economic policies.

He also rattled some investors by threatening China with even more tariffs if the two countries do not reach a deal. trade uncertainty weighed on U.S. equities, with further pressure coming from ongoing protests in Hong Kong. .N

Anti-government protesters in Hong Kong planned to paralyze parts of the Asian financial hub for a third day, with transport, schools and many businesses closing after violence escalated across the city. also took stock of latest comments from the U.S. Federal Reserve, with Fed Chair Jerome Powell saying that the central bankers see a "sustained expansion" ahead for the U.S. economy, while the full impact of recent interest rate cuts has yet to be felt. U.S. CPI data was better than expected as consumer prices for the month of October rose by 0.4%, exceeding expectations. reaction to Powell's comments, however, was relatively muted.

"They're (the Fed) not going to make any kind of move on interest rates. So as a result of that gold futures continue to remain firm," said Phillip Streible, senior commodities strategist at RJO Futures.

Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion.

Among other precious metals, palladium XPD= climbed 0.6% to $1,709.64 an ounce. The metal hit an all-time high of $1,824.50 on Oct. 30 as a result of a sustained supply crunch.

The auto-catalyst metal, could, however, be headed for a pullback, RJO Futures' Streible said.

Silver XAG= gained 0.9% to $16.92 per ounce and platinum XPT= was up 0.5% to $873.03 an ounce and was set to end four straight sessions of declines.

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