December 4, 2019 / 4:49 AM / 8 days ago

PRECIOUS-Gold hits near 1-month high as trade drag prompts safety buying

 (Updates prices, adds comments)
    * Trump says China trade deal may have to wait until next
year
    * Dollar hovers near one-month low, stocks extend losses
    * GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl

    By Asha Sistla
    Dec 4 (Reuters) - Gold prices rose to a near one-month high
on Wednesday, as U.S. President Donald Trump's comments dampened
hopes for a quick preliminary trade agreement with China,
driving support for safe-haven assets.
    Spot gold        gained 0.3% to $1,482.02 per ounce by 0707
GMT, its highest since Nov. 7, while U.S. gold futures        
were up 0.2% to $1,487.90.
    President Trump on Tuesday said a deal with China might have
to wait until after the U.S. presidential election in November
2020.             
    Trump's comments come shortly after he slapped tariffs on
U.S. steel and aluminium imports from Brazil and Argentina.
            
    "Gold has benefited from strong safe-haven flows, equities
tanked and the dollar fell as well. And, that's the reason why
gold has risen overnight," said Jeffrey Halley, senior market
analyst, Asia Pacific at OANDA.
    "President Trump saying a trade deal may not happen until
after the U.S. election next year and the passage of the second
China bill in the House of Representatives will add to the
extreme trade worries because the fear is - China might just
walk away from any trade negotiations."
    The U.S. House of Representatives approved a bill that would
require Washington to toughen its response to China's crackdown
on its Uighur Muslim minority, which investors fear can possibly
deteriorate trade ties.                          
    Dimming hopes of a deal further, U.S. Commerce Secretary
Wilbur Ross rejected any deadlines on a trade deal with Beijing
and launched a fresh attack on telecoms giant Huawei         .
            
    Trump's remarks prompted investors to reduce their exposure
to risk, with Asian shares extending their losses, while the
U.S. dollar hovered close to a one-month low, making gold more
attractive.                   
    Gold, which is seen as safe investment during times of
political and economic stress, has gained about 15% so far this
year, mainly due to the 17-month long trade dispute and its
impact on the global economy.
    "Bull-run in gold is expected to continue and it can touch
the $1,500 level this week, and $1,520 in the week going
forward," said Kunal Shah, head of research at Nirmal Bang
Commodities in Mumbai, India.
    Among other precious metals, palladium        was flat at
$1,855.39 per ounce, after scaling to an all-time peak of
$1,861.71 on Dec. 2. 
    "Platinum and palladium are rallying because they have an
industrial use and there's just a massive squeeze on the
supplies," OANDA's Halley said.
    Platinum        advanced 0.3% to $912.46 per ounce and
silver        rose 0.4% to $17.22.

 (Reporting by Asha Sistla in Bengaluru, Editing by Sherry
Jacob-Phillips and Uttaresh.V)
  
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