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PRECIOUS-Gold slips as signing of trade deal, U.S. data prop up stock markets

Published 17/01/2020, 06:52 am
PRECIOUS-Gold slips as signing of trade deal, U.S. data prop up stock markets
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(Adds comment, updates prices)

* Palladium scales record high of $2,395.14/oz

* Platinum jumps to highest level since February 2017

* U.S. data shows solid economic strength

By Eileen Soreng

Jan 16 (Reuters) - Gold slipped on Thursday as the safe-haven metal was hurt by upbeat U.S. economic data that signalled a healthy economy and as stock markets climbed on optimism over the signing of the U.S.-China Phase 1 trade deal.

Spot gold XAU= fell 0.3% to $1,551.53 per ounce at 2:37 p.m. EST (1937 GMT). U.S. gold futures GCv1 settled down 0.2% at $1,550.50.

"Gold is softer right now on stronger equities, and as the geopolitical front is also getting a little quiet when it comes to China and Iran issues," said Bob Haberkorn, senior market strategist at RJO Futures.

World stocks scaled new records, while the dollar index .DXY erased earlier losses after multiple data releases painted a positive U.S. economic picture. MKTS/GLOB USD/

U.S. retail sales rose for a third straight month in December and a U.S. Mid-Atlantic manufacturing activity gauge revived to its highest in eight months. holiday sales rose 4.1% in 2019 from a year earlier, as steady wage and job growth encouraged shoppers to splurge on groceries, beverages and furniture, the National Retail Federation said. much-awaited Phase 1 trade deal was signed by U.S. President Donald Trump and Chinese Vice Premier Liu He on Wednesday, defusing an 18-month-long row that roiled global markets. noted the deal fails to address structural economic issues, does not fully eliminate the tariffs, and sets hard-to-achieve purchase targets, leaving a number of sore spots unresolved. palladium XPD= gained 1% to $2,286.43 an ounce, after hitting a record peak of $2,395.14 earlier in the session.

"It's such a small, tight market that when someone takes a big lump of supply out in the short term the market can become completely ruptured", said Tai Wong, head of base and precious metals derivatives trading at BMO.

"I'd be surprised if we don't see a correction sometime in the next week or so."

Platinum XPT= dipped 1.9% to $1,001.12, having hit its highest since February 2017 at $1,041.05.

There could be some profit-taking in platinum after a substantial increase in net long positions being established as implied by the open interest data, said Standard Chartered (LON:STAN) Bank analyst Suki Cooper, adding there is a potential for demand growth in longer term.

"Key level to watch in the near term is $979, there should be some initial support around those levels."

Both platinum and palladium are primarily used by automakers for catalytic converter manufacturing to clean car exhaust fumes.

Silver XAG= fell 0.3% to $17.94 per ounce.

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