Spot gold gained 0.1% to $1,506.78 per ounce as of 0724 GMT, having notched a peak of $1,516.77 early in the session, its highest since Oct. 3. U.S. gold futures dropped 0.1% to $1,511.80.
· “Gold is holding strong above $1,500 because of healthy inflows by ETFs (exchange-traded funds). If the U.S.-China trade talks fail once again, gold prices could rally,” said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers.
“Prices are not falling, because of strong investment demand and fundamental factors. $1,490 is the current support, and if prices drop below this, there could be an extended fall till $1,460.”
· A report from the New York Times said Washington would soon issue licences permitting some U.S. firms to supply non-sensitive goods to China’s Huawei Technologies.
· A report by Bloomberg, saying the White House was looking at rolling out a currency pact with China, raised hopes of a partial deal and helped to lift risk assets.
· The South China Morning Post had reported earlier in the session that a Chinese delegation was planning to leave Washington after just a day of minister-level meetings, instead of Friday as planned, sending Asian stocks toppling. However, risk sentiment has recovered slightly since.
· “Gold ETF holdings are at three-year highs and lots of central banks are also buying, which is keeping prices supported,” said Argonaut Securities analyst Helen Lau, adding that some volatility could be expected in the gold market.
· Indicative of investor interest, holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, have been at their highest since November 2016.
· Spot gold looks neutral in a range of $1,488-$1,514 per ounce, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.
· Investors also sought further cues on the U.S. Federal Reserve’s trajectory on monetary easing later in the month.
· “Global trade uncertainties along with subdued global growth will remain supportive towards safe-haven assets in the current term,” Phillip Futures analyst Benjamin Lu said in a note.
· Gold trims gains as White House dismisses news of US-China trade-talk fallout
Gold is currently trading at $1,512 per Oz, representing 0.30% gains on the day, having hit a high of $1,517 at 22:55 GMT on Wednesday.
The yellow metal had picked up a strong bid at lows near $1,505 on reports stating that lack of progress in the US-China trade talks.
High-level talks are expected to last for only one day, with Liu He and his team now planning to leave Washington on Thursday, South China Morning Post cited a person with knowledge of the matter. The news report triggered risk aversion, sending the futures on the S&P 500 down by more than 0.5%.
The risk-off, however, has weakened somewhat in the last few minutes with White House's spokesperson Judd Deere calling SCMP report inaccurate. Deere told CNBC's Washington Correspondent Kayla Tausche that the White House is not aware of a change in the Vice Premier Liu His plans at the time and the Chinese are scheduled to depart Friday evening.
Gold trimmed gains after Deere's comments. Prices dropped to $1,507 a few minutes before press time, before bouncing back to $1,512. The yellow metal, however, may again rise to levels near $1,520 if the White House confirms the news of trade-talk fallout. It is worth noting that Fox Business is also reporting an early end of trade talks.
· Silver rose 0.1% to $17.72 per ounce, palladium inched 0.2% higher to $1,684.91 and platinum was little changed at $891.49 an ounce.
Reference: Reuters, FX Street
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