Gold holds steady as US-China trade-talk optimism ebbs

Singapore (Oct 15)  Gold prices held steady on Tuesday as optimism surrounding US-China trade negotiations faded, while investors awaited outcome of a crucial discussion that will determine how Britain will depart from the European Union.

Spot gold rose 0.1 per cent to $1,493.77 per ounce as of 0406 GMT. US gold futures also inched up 0.1 per cent to $1,498.40 per ounce.

“Markets enjoyed a good risk-on rally, but on Monday news saying that China required more negotiation and talks before they find any deal, which is very disappointing,” said Margaret Yang Yan, a market analyst at CMC Markets. “Gold is in a consolidation phase, momentum is weak for a good rebound. The market is making lower highs and lower lows.”

A Bloomberg report on Monday, citing sources, said China wants more talks as soon as the end of October to hammer out the details of Trump's phase 1 deal before Chinese President Xi Jinping agrees to sign it.

Sombre data from China reinforced the case for Beijing to unveil further stimulus as manufacturing cools on weak demand and US trade pressures. China's factory gate prices declined at the fastest pace in more than three years in September.

Late on Friday, the United States outlined the first phase of a trade deal and suspended this week's scheduled tariff hikes on Chinese goods, but existing tariffs remained in place and officials on both sides said much more work was needed before an accord could be agreed.

BusinessLine

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