• Spot gold prices bounced from 19-month lows on Thursday, as the U.S. dollar slipped on news that China and the United States will hold trade talks this month, although sentiment remained negative.
• Gold futures settled slightly down as the U.S. dollar came off its lows later in the trading session, yet remained negative.
• Spot gold gained 0.3 percent at $1,177.80 an ounce by 1:39 p.m. EDT (1739 GMT), from an earlier low of $1,159.96, its weakest since January last year. U.S. gold futures for December delivery settled down $1, or 0.1 percent, at $1,184 per ounce.
• “The lower dollar index is helping gold, and the fact that the Chinese sent a delegation over,” said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals.
“There was heavy (gold) selling out of China last night. Once the selling was done, a short-covering rally ensued,” he added.
• The meeting between a Chinese delegation and U.S. representatives offers hope for progress in resolving the trade conflict that has unnerved financial and commodity markets in recent weeks.
• Political and economic uncertainty have seen investors opt for the safety of U.S. Treasuries and the U.S. currency, which when it rises makes dollar-denominated gold more expensive for holders of other currencies, potentially subduing demand.
• “I’m viewing the news of the talks as arresting the slide, not reversing it. The talks are low level, we are not out of the woods yet, sentiment is still bearish,” said Ole Hanson, head of commodity strategy at Saxo Bank.
• “The underlying narratives of a strong dollar and relatively high U.S. interest rates still seem to be the predominant headwinds for gold,” said INTL FCStone analyst Edward Meir.
• Higher interest rates raise the cost of holding gold, which earns nothing and needs money to store and insure.
• Meanwhile, silver gained 1.7 percent at $14.67 an ounce after earlier hitting the lowest since February 2016 at $14.30.
Palladium added 6 percent at $893.30 an ounce, earlier hitting a more than 13-month low at $832.
Platinum climbed 2.6 percent at $782.98 an ounce, after earlier sinking to its lowest since October 2008 at $751.25.
• Autocatalyst metal platinum is oversupplied. South Africa, the world’s top platinum producer, saw its rand currency hit a two-year low due to contagion from the Turkish lira earlier this week.
• A lower rand cuts costs for South African miners when expressed in dollars, which means they can keep producing and delaying the process of rebalancing the market.
Reference: Reuters
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