January 14, 2020 / 5:45 AM / 4 days ago

PRECIOUS-Gold dips to near 2-week low on solid China data, trade deal optimism

 (Updates prices)
    * U.S. removes currency manipulator label for China
    * China Dec exports, imports rise more than expected
    * Silver hits lowest level since late December

    By Asha Sistla
    Jan 14 (Reuters) - Gold prices fell to their lowest in
nearly two weeks on Tuesday as risk appetite was whetted by
stronger-than-expected China economic data and the imminent
signing of a preliminary U.S.-China trade deal.
    Spot gold        slipped 0.4% to $1,541.81 per ounce by 0725
GMT. Earlier in the day, prices fell to their lowest since Jan.
3 at $1,535.63. U.S. gold futures         dropped 0.5% to
$1,542.40.
    Asian shares rallied amid signs of goodwill between the
world's two top economies as they prepared to sign a truce in
their 18-month-long tariff dispute that has upended the global
economy.            
    "It is mainly because of increased risk appetite and U.S.
removing China's label as a currency manipulator that has
greatly eased any economic tensions between these two
countries," said Helen Lau, analyst at Argonaut Securities.
    Just a day before the Phase 1 trade deal signing, the U.S.
Treasury on Monday dropped China's designation as a currency
manipulator, signalling a further thawing of relations.
            
    U.S. Trade Representative Robert Lighthizer said the Chinese
translation of the deal was nearly done and would be made public
prior to the signing ceremony on Wednesday.             
    Meanwhile, a Reuters report said China has pledged to buy
nearly an additional $80 billion of manufactured goods and over
$50 billion more in energy supplies from the United States over
the next two years.             
    However, concerns remained that the trade war that has
roiled global markets over the past one and a half years is not
over.                 
    Data out of China showed exports rose for the first time in
five months in December, while imports also surpassed
expectations.             
    Stronger-than-expected import and export numbers showed
stabilisation of the Chinese economy - a very positive sign for
global economic growth, Argonaut Securities' Lau said.
    Gold prices gained 18% last year mainly driven by the tariff
dispute and its impact on the global economy.
    "With such strong global growth sentiment evident in markets
around the world, and a lack of geopolitical tensions to give
support, gold's price erosion is likely to continue," Jeffrey
Halley, senior market analyst, OANDA, said in a note.
    Spot gold may fall towards $1,524 per ounce, according to
Reuters technical analyst Wang Tao.         
    Elsewhere, silver        was down 1.2% to $17.76 per ounce,
having hit its lowest since late December at $17.64 earlier in
the session.
    Palladium        was flat at $2,132.83 an ounce, while
platinum        fell 0.6% to $968.48.

 (Reporting by Asha Sistla in Bengaluru; Editing by Subhranshu
Sahu)
  
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