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Gold firms as markets await clarity on trade talks

Gold firms as markets await clarity on trade talks
Written by Maritime First

Gold prices inched up on Wednesday after slipping more than 1 per cent in the previous session, as investors awaited further clarity on the U.S.-China trade talks.

Spot gold was up 0.2 per cent to 1,486.53 dollars per ounce at 0121 GMT, having dipped 1.7 per cent on Tuesday.

This was the biggest one-day percentage drop since late September.

U.S. gold futures were 0.3 per cent higher at 1,488 per cent per ounce.

Asian shares were little changed as investors awaited new developments toward scaling back a bruising trade war between the United States and China.

Treasury yields fell slightly in Asia and crude oil futures also dipped as some investors started to temper their optimism about progress in the trade dispute in the absence of concrete progress in negotiations between the world’s two-largest economies.

Washington and Beijing are working to narrow their differences enough to sign a “phase one” trade deal as early as this month, but suggestions for a signing venue range from Alaska to Greece.

The dollar held the upper hand against a basket of major currencies on Wednesday, on rising hopes for a trade deal and a string of solid U.S. economic data.

Also read:  Gold rises as investors weigh fallout of U.S. midterm verdict

A stronger dollar makes gold expensive for buyers holding other currencies.

Meanwhile, U.S. ISM non-manufacturing data for October came in better-than-expected easing some fears of recession.

Minneapolis Federal Reserve Bank President Neel Kashkari on Tuesday said he believes U.S. monetary policy is now “modestly accommodative,” a view that puts him on the same page as most of his colleagues at the U.S. central bank.

The Fed last week cut its target for the overnight bank-to-bank lending rate for the third time this year, to a range of 1.5 per cent and 1.75 per cent.

British Prime Minister Boris Johnson will formally announce a Dec. 12 election on Wednesday, urging voters to back him and promising to “get Brexit done in the next few weeks”.

SPDR Gold Trust (GLD), the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.13 per cent to 915.85 tonnes on Tuesday from 914.67 tonnes on Monday.

 

 

-Reuters

 

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