Gold price slips as investors’ risk appetite returns

November 12, 2019

Bengaluru (Nov 12)  Gold prices eased on Tuesday as the expectation of positive trade talks between the US and China bolstered risk appetite, while investors booked profits.

Spot gold slipped 0.2% to $1,453.46/oz as of 12.11am GMT, extending declines into a fourth consecutive session. US gold futures also dropped 0.2%, to $1,454.20/oz.

World markets edged higher on Tuesday as investors awaited a speech by US President Donald Trump on trade policy, following news he will probably delay a decision on whether to slap tariffs on European cars.

EU officials said Trump was expected to announce this week he was delaying the tariff decision on cars and car parts imported from the EU likely for another six months, also boosting the expectation about the president’s speech later in the day about the long-drawn trade war with China.

“[The trade talks are] probably going to end in a truce, but that could change with a tweet. So we will continue to have that nervousness in the background,” said ABN Amro analyst Georgette Boele, adding that gold’s dip was largely due to profit-taking.

“We are close to quite an important level. From a technical point of view, $1,450 was a breakout level.”

Last week, officials from China and the US said they had a deal to roll back tariffs, only for Trump to deny any pact had been agreed.

“Bullion was heavily sold on growing expectations of a trading deal between the US and China, and also due to the strengthening of the greenback,” said Carlo Alberto De Casa, chief analyst at ActivTrades, in a note.

“The breakdown of the support level of $1,480 has triggered some profit-taking, with investors willing to bring home gains achieved in the first part of the year after this correction.”

However, violent protests in Hong Kong at the weekend kept investors anxious, knocking Asian shares down for two consecutive sessions.

Hong Kong police fired teargas in the heart of the Central financial district on Tuesday and at two university campuses after territory-wide transport disruptions wreaked commuter havoc in the Chinese-ruled city.

Elsewhere, palladium gained 1.1% to $1,705.99/oz, silver dropped 0.5% to $16.78/oz, and platinum inched 0.2% higher to $877.30.


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