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PRECIOUS-Gold softens as trade deal signs boost equities, dollar

Published 28/11/2019, 12:42 am
© Reuters.  PRECIOUS-Gold softens as trade deal signs boost equities, dollar
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(Updates prices)

* Trump says U.S. in the "final throes" of a deal with China

* U.S. Fed to issue Beige Book of economic conditions at 1900 GMT

By K. Sathya Narayanan

Nov 27 (Reuters) - Gold prices dipped back towards the previous session's two-week low on Wednesday as increasing signs that an interim trade deal could soon be reached buoyed riskier assets and the U.S. dollar.

Spot gold XAU= was down 0.4% at $1,456.01 per ounce as of 1327 GMT, while U.S. gold futures GCcv1 were 0.3% lower at $1,455.80.

Having dropped to a two-week low of $1,450.30 early on Tuesday, gold prices bounced back to settle higher, ending a four-session losing streak.

"The decline of today is relatively small and can be seen as a consolidation after yesterday's recovery," said Carlo Alberto De Casa, chief analyst at ActivTrades. Rising share prices and a recovering dollar were relatively bearish for gold, he said.

"What's important is that prices are holding above $1,450... If prices fall below $1,445, then there will be a clear signal that we are entering a danger zone," De Casa said, adding the markets are waiting for further details on the trade talks.

U.S. President Donald Trump on Tuesday said Washington was in the "final throes" of a deal that would defuse the 16-month tariff dispute with Beijing. for an imminent closure to the long-drawn trade dispute encouraged world shares to make another push for a record high on Wednesday and supported the U.S. dollar against its key rivals. MKTS/GLOB USD/

Any increase in appetite for risk-bearing assets tends to weigh on safe havens such as gold and yen, while a strong U.S. currency makes greenback-denominated bullion costlier for investors holding other currencies.

But market participants were still wary that bills passed by the United States supporting anti-government protesters in Hong Kong could complicate negotiations. though, gold remains in the doldrums, entirely at the mercy of movements in other markets," Jeffrey Halley, senior market analyst, Asia Pacific at OANDA said in a note.

"Critical support remains at $1,445 an ounce, with formidable technical resistance remaining at $1,480 an ounce. Gold is adrift, with neither sail nor a following breeze, between these levels."

Investors were also awaiting the Fed's Beige Book of economic conditions among other data due later in the day.

The U.S. central bank cut benchmark rates in October for the third time this year before signalling a pause, adding another reduction was unlikely unless there was a downturn in the economy. silver XAG= shed 0.4% to $17 per ounce.

Palladium XPD= fell 0.3% to $1,805 an ounce, having surged to a three-week high on Tuesday, while platinum XPT= was down 0.4% to $903.61.

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