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PRECIOUS-Gold rises on trade deal uncertainty, economic slowdown, HK violence

Published 11/11/2019, 08:03 pm
© Reuters.  PRECIOUS-Gold rises on trade deal uncertainty, economic slowdown, HK violence
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* Chinese PPI falls 1.6% in October

* SPDR Gold holdings fell 1.4% on Friday

* Gold up nearly 14% this year (Adds comments; updates prices)

By Diptendu Lahiri

Nov 11` (Reuters) - Gold recovered slightly on Monday from the previous session's three-month low, with buying driven by concerns over the global economy, uncertainty over whether the United States and China will reach a trade deal, and the mounting violence in Hong Kong.

Spot gold XAU= was up 0.3% at $1,463.42 per ounce at 0811 GMT, while U.S. gold futures GCv1 were up 0.2% at $1,465.70 per ounce.

"Gold prices are pretty low now and investors are taking this opportunity to take positions in the safe-haven metal as there is still an upside to it, considering the concerns over the trade war and global economy," said Brian Lan of Singapore dealer GoldSilver Central.

Gold buying by central banks, especially in China, is also boosting prices, Lan added. also noted the worsening violence in Hong Kong, where police shot and wounded one anti-government protester on Monday, as the Chinese-ruled territory endured its 24th straight week of pro-democracy unrest. are going through a technical bounce back from the recent lows and the geopolitical tensions in Hong Kong are providing further boost," said Hareesh V, head of commodity research at Geojit Financial Services.

On the trade front, talks with China were moving along "very nicely," U.S. President Donald Trump said on Saturday, but the United States would only make a deal with Beijing if it was the right one for America. and Beijing had agreed to roll back tariffs as part of the first phase of a trade deal, but Trump later denied any such agreement. trade war has roiled financial markets and spurred fears of a global economic slowdown, pushing the precious metal up 14% this year.

If the world's two largest economies fail to reach a deal to end their trade war it could push prices to the $1,500-level, said Lan.

Fanning concerns over global growth, China's producer price index (PPI), partly seen as a guide to trends in corporate profitability, fell 1.6% in October from a year earlier, its steepest decline since July 2016, outstripping analysts' expectation for a contraction of 1.5%. next technical support is at $1,450, after which the charts open wide until $1,400 an ounce," OANDA analyst Jeffrey Halley said in a note.

Asian shares sank on Monday as uncertainty still remained over whether the United States and China could end their damaging trade war. MKTS/GLOB

SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, said its holdings fell 1.44% to 901.19 tonnes on Friday. GOL/ETF

Elsewhere, silver XAG= was up 0.5% at $16.88 per ounce, platinum XPT= was flat at $887.41 per ounce and palladium XPD= rose 0.2% to $1,745.74 an ounce.

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