December 05, 2019

Gold prices gain on mixed U.S.and China trade signals

(Reuters) - Gold prices edged up on Thursday as conflicting signals from Washington and Beijing prolonged the uncertainty about a trade deal, a day after positive comments by U.S. President Donald Trump knocked the bullion off its one-month high.

    Gold rose to a one-month high of $1,484 on Wednesday, but settled lower after Trump said that trade talks with China were going "very well."            

    That came a day after Trump dented hopes for a trade resolution when he said an agreement might have to wait until after the U.S. presidential election in November 2020.           

    Spot gold was up 0.1% to $1,475.18 per ounce by 0435 GMT on Thursday, and U.S. gold futures        was flat at $1,480.50.

    "Trump mentioned he is happy to wait a year for the China deal to happen and we are not sure whether the first agreement has been inked yet and that's what everybody is looking for," said Brian Lan of Singapore dealer GoldSilver Central.

    "Gold has always had the safe-haven asset status and people hold on to gold when they don't know what's going to happen ... U.S. dollar has weakened a bit and that has also helped push gold prices at this time."

    The dollar index extended losses and was down 0.1%, making gold cheaper for investors holding other currencies.

    Gains in bullion, however, were limited as stocks strengthened after Trump's positive comments on trade.         

     A further 15% U.S. tariff on about $156 billion worth of Chinese imports is set to take effect on Dec. 15. Washington and Beijing have yet to ink a so-called "phase one" agreement announced in October, which had raised hopes of a de-escalation.

    Gold has gained about 15% so far this year, which could be its biggest annual gain since 2010, mainly bolstered by the impact of prolonged U.S.-China trade war on global economy.

    "With doubts emerging about a U.S.-China trade talk, we expect investor demand for safe-haven assets, such as gold-backed ETFs, to increase," ANZ analysts said in a note.        

    In other precious metals, palladium remained unchanged at $1,869.59 per ounce, holding close to a record peak of $1,873.50.

    "Tougher environmental regulations are also boosting palladium demand ... As the average loading of palladium  in autocatalysts increases, we expect to see an ongoing surge in demand for palladium-rich autocatalysts," ANZ said.

    Silver was up 0.3% at $16.87, while platinum rose 0.5% to $898.81 per ounce.