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PRECIOUS-Gold dips as hopes for U.S.-China trade deal re-emerge

Published 22/11/2019, 06:20 am
© Reuters.  PRECIOUS-Gold dips as hopes for U.S.-China trade deal re-emerge
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* Gold has gained over 14% so far this year

* China invites top U.S. negotiators for more talks -WSJ (Updates prices)

By K. Sathya Narayanan

Nov 21 (Reuters) - Gold prices eased on Thursday as a report that China has invited top U.S. negotiators for a new round of talks rekindled some hopes regarding the U.S.-China trade deal, but mixed signals on the progress of talks limited bullion's losses.

Spot gold XAU= dipped 0.5% to $1,464.43 per ounce as of 1:49 p.m. EST (1849 GMT). Prices had notched a two-week high of $1,478.80 in the previous session before turning negative.

U.S. gold futures Gcv1 fell 0.7% to settle at $1,463.60 per ounce.

"Stocks are a little weak right now, but gold is still negative and that is kind of concerning. If stocks continue to go higher and there is some optimism about the trade deal, then I am expecting gold to have a washout," said Daniel Pavilonis, senior market strategist at RJO Futures.

China will strive to reach an initial trade agreement with the United States as both sides keep communication channels open, the Chinese commerce ministry said on Thursday.

The Wall Street Journal also reported that Beijing has invited U.S. trade negotiators for a new round of face-to-face talks. next round of tariffs on Chinese goods is due on Dec. 15.

However, global equities and the U.S. currency markets are still nervous about the fate of the impending "phase-one" trade deal after Washington passed two bills intended to support protesters in Hong Kong and send a warning to China on its human rights policies. MKTS/GLOB USD/

There have been increasingly violent protests in Hong Kong against Chinese rule for several months and the passage of the bills could potentially undermine efforts to secure a trade deal.

"Ultimately gold is going to continue to go higher but we may get a washout before the market moves high. There is a possibility that we get back to (the) 200-day moving average to find some support, which is around $1,400," Pavilonis added.

Bullion, seen as a safe haven during times of economic and political uncertainties, has gained over 14% so far this year, which could be its biggest yearly gain since 2010.

"There have been some buyers on dips and the holders of gold still hope prices will go higher. But if this does not materialise in the near-term, they will likely take profit on longs, pushing prices lower," said ABN Amro analyst Georgette Boele.

Among other precious metals, palladium XPD= slipped 0.3% to $1,760.76 an ounce, declining after three straight days of gains.

Silver XAG= was down 0.3% at $17.08 per ounce; and platinum XPT= fell 0.3% to $914.36.

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