November 18, 2019 / 5:30 AM / 23 days ago

PRECIOUS-Gold prices dip on optimism over U.S.-China trade deal

    * Gold neutral in narrow $1,462-$1,472/oz range- technicals
    * Investors await U.S. Fed minutes on Wednesday

 (Adds comments; updates prices)
    By Diptendu Lahiri
    Nov 18 (Reuters) - Gold prices edged down on Monday as
optimism grew about U.S.-China trade ties following a report of
"constructive talks" over the weekend, while losses were capped
by a softer dollar.
    Spot gold        was down about 0.3% to $1,463.40 per ounce
at 0732 GMT, while U.S. gold futures        were 0.4% lower at
$1,462.90.
    Chinese state media Xinhua reported Washington and Beijing
had a high-level phone call on Saturday and that the two sides
discussed each other's core issues for the first phase of an
initial trade agreement.             
    "The first phase of the deal is extremely important to
investors as it will set the tone for later phases," said
Hareesh V, head of commodity research at Geojit Financial
Services.
    Asian shares advanced after Beijing surprised markets by
trimming a key interest rate for the first time since 2015,
stirring speculation that more stimulus was on the way for the
world's second-largest economy.                        
    "A recovery in risk sentiment across Asia and investors
cautiously optimistic about the phase one deal to go through
before Christmas, are weighing on gold," said Margaret Yang Yan,
a market analyst at CMC Markets, adding that a weak dollar 
limited the metal's fall.
    The dollar was a shade softer        versus major
currencies.       
    "In all likelihood, a breakdown in trade talks remains the
only scenario to breathe new life into gold prices at this
time," Jeffrey Halley, senior market analyst, Asia Pacific at
OANDA said in a note.
    Investors also kept a close eye on developments in Hong
Kong, with police on Monday trapping hundreds of protesters
inside a major university and demonstrators rampaging through a
tourist district, after almost two straight days of standoffs.
            
    Gold is considered a safe store of value during times of
economic or political uncertainty.
    Market participants now await minutes of the Federal
Reserve's last policy meeting, due on Wednesday, for clues about
the future interest rate trajectory.
    Gold is highly sensitive to interest rates, as a lower
interest reduces the opportunity cost of holding the
non-yielding bullion.
    On the technical front, spot gold looks neutral in a narrow
range of $1,462-$1,472 per ounce but a break above $1,472 may
lead to a gain limited to $1,480, according to Reuters technical
analyst Wang Tao.             
    Among other metals, silver        was down 0.6% at $16.85
per ounce, while platinum        inched down 0.1% to $888.41 per
ounce.
    Palladium        rose 0.7% to $1,716.61 per ounce.

 (Reporting by Diptendu Lahiri in Bengaluru; Editing by Shailesh
Kuber and Subhranshu Sahu)
  
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