Gold was largely muted on Tuesday, weighed down by buoyant Asian shares that cheered progress in trade talks between the United States and China, but found support from a lack of clarity in the negotiation details.
Spot gold was little changed at $1,484.12 per ounce as of 0423 GMT.
U.S. gold futures shed 0.1 percent to $1,487.10 per ounce.
China and the United States have achieved some progress in their trade talks, Chinese Vice Foreign Minister Le Yucheng said on Tuesday, adding that as long as both sides respected each other, no problem could not be resolved.
Le’s comments came a day after U.S. President Donald Trump spoke of optimism about a deal, while White House adviser Larry Kudlow said tariffs on Chinese goods scheduled for December could be withdrawn if talks go well.
This cheered markets and pushed the benchmark S&P 500 stock index within striking distance of a record high on Monday. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.1 percent on Tuesday.
“Equities markets are in a risk-on mode, and there seems to be a lack of support for gold prices and precious metals,” said Margaret Yang Yan, a market analyst at CMC Markets, adding that fears of a no-deal Brexit had ebbed and progressing U.S.-China trade talks gave markets some relief.
In the latest on the Brexit proceedings, British Prime Minister Boris Johnson’s parliamentary battle starts again on Tuesday, when lawmakers will debate and vote on the Withdrawal Agreement Bill, the detailed legislation that puts his exit deal into British domestic law.
“The (slip in prices) does not mean gold will continue to decline, because the market sees the Fed cutting another 25 basis points in its October meeting. For now it still looks like a healthy correction,” Yan said.
Investors await a U.S. Federal Reserve meeting at the end of the month that could offer further signs of monetary easing.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
Amongst other precious metals, silver slipped 0.1 percent to $17.55 an ounce, snapping a four-day gaining streak. Platinum dropped 0.5 percent to $883.36 and palladium gained 0.6 percent to $1,768.63 an ounce.
Source: Reuters
