Gold drops as easing trade fears lead to riskier bets
Gold inched lower on Monday as investors moved to riskier assets following the announcement of an interim deal between the United States and China that cooled a 17-month-old trade dispute.
Spot gold was down 0.1 percent at $1,473.88 per ounce, as of 0050 GMT. U.S. gold futures were down 0.2 percent at $1,478.60.
The “phase one” trade agreement was announced on Friday and on Sunday U.S. Trade Representative Robert Lighthizer said U.S. exports to China will nearly double over the next two years although officials are yet to decide a date to sign the agreement.
The United States suspended some tariffs on Chinese goods that was due to go into effect on Sunday, while China State Council’s customs tariff commission said it had dropped its plan for additional tariffs on some U.S. goods.
Asian shares rose as investors breathed a sigh of relief after a thaw in tariff war.
The U.S. economy is doing well and looks set to stay that way next year, two top Federal Reserve policymakers said on Friday, remarks that suggest they are content to leave interest rates where they are.
However, data from U.S. showed on Friday retail sales increased less than expected in November as Americans cut back on discretionary spending despite a strong labor market.
In the UK, British Prime Minister Boris Johnson will “get Brexit done” by January 31 and then agree to a new trade deal with the European Union by the end of 2020, cabinet office minister Michael Gove said on Sunday.
Speculators slashed their bullish positions in COMEX gold in the week to Dec. 10, data showed.
Gold dealers in India offered a discount last week due to plentiful supplies and slack demand during the wedding season, with other regions in Asia expecting improvement in buying ahead of the Christmas and Chinese New Year festivities.
Elsewhere, palladium rose 0.6 percent to $1,941.09 an ounce, silver shed 0.1 percent to $16.92 per ounce, while platinum fell 0.2 percent to $926.08.