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PRECIOUS-Gold slumps to 1-month low on U.S.-China tariff rollback

Published 08/11/2019, 06:16 am
© Reuters.  PRECIOUS-Gold slumps to 1-month low on U.S.-China tariff rollback
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(Adds comments, graphic, updates prices)

* Gold, silver break below 100-day moving average

* Silver falls over 3% to hit over one-month low

* Wall Street's three main stock indexes hit record highs

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

By K. Sathya Narayanan

Nov 7 (Reuters) - Gold slid about 2% on Thursday to its lowest level in over a month as investor appetite for the safe-haven metal decreased after a U.S. official confirmed that Washington and China agreed to roll back tariffs as part of the first phase of a trade deal.

Spot gold XAU= was down 1.7% at $1,465.78 per ounce as of 1:43 p.m. EST (1843 GMT), having earlier slipped 2% to $1,460.75, its lowest since Oct. 1.

U.S. gold futures GCcv1 settled down 1.8% at $1,466.4.

"The optimism around potential agreement or the phase one agreement is seeing some of the safe-haven flows starting to ease and some profit taking emerging on the back of that," said Suki Cooper, precious metals analyst at Standard Chartered (LON:STAN) Bank.

"Over the past week, we saw a number of risks that were supporting gold market starting to ease, such as concerns around the trade, Brexit, and the Federal Reserve indicating a hawkish tilt ... So, it is almost a delayed response with profit taking materializing."

China and the United States agreed to cancel, in phases, the tariffs imposed during their months-long trade war, the Chinese commerce ministry said earlier on Thursday. A U.S. official confirmed the same later in the day. Street's three main stock indexes hit record levels and a gauge of worldwide equities surged to a 21-month high on trade deal optimism, while dollar .DXY scaled a three-week peak against key rivals. MKTS/GLOB USD/

Further weighing on bullion, U.S. 10-year Treasury yields US10YT=RR rose to highest since Aug. 1. US/

Gold prices have fallen nearly 6.2% since hitting a multi-year high of $1,557 an ounce in early September.

It was also trading below its 100-day moving average of about $1,476 an ounce for the first time since May.

"Gold is in danger of breaking below its key recent range as trade optimism continues to drive a global risk-on rally move that is driving both global bond yields and the major indexes sharply higher," said Edward Moya, a senior market analyst at OANDA.

"Gold's longer-term bullish outlook should still be reasserting itself, but that might not happen until we see a major sell-off that targets the $1,450 an ounce level."

Among other precious metals, silver XAG= dipped 3.2% to $17.07 per ounce, after touching its lowest since Oct. 1 and breaking the 100-day moving average around $17 for the first time sine July.

It was en route to its biggest one-day percentage fall since late-September.

Platinum XPT= fell 1.9% to $911.20 per ounce, while palladium XPD= gained 0.6% to $1,803.46 per ounce.

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https://tmsnrt.rs/2oW2t54

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