November 19, 2019 / 11:28 AM / 24 days ago

PRECIOUS-Gold slips as fresh hopes for U.S.-China deal boost stocks

    * European share markets hit four-year high 
    * U.S. Fed minutes due on Wednesday
    * Support for gold around $1,450 - analyst
    * SPDR gold holdings fall 0.6% on Monday

 (Updates prices)
    By Asha Sistla
    Nov 19 (Reuters) - Gold fell on Tuesday, erasing gains from
earlier in the session, as a temporary reprieve from Washington
for China's Huawei rekindled optimism for a trade deal between
the countries and boosted risk sentiment.
    Spot gold        was down 0.2% to $1,467.78 per ounce at
1228 GMT, reversing course from Asian trading hours, when prices
rose to their highest since Nov. 7 at $1,475.40.
    U.S. gold futures         fell 0.3% to $1,468.10 per ounce.
    "Stock markets are up, investors are less risk averse and
prefer more risky assets against safe havens and that is also a
factor (affecting gold)," Quantitative Commodity Research
analyst Peter Fertig said.
    "Gold is following closely the statements from the U.S.
administration concerning negotiations with China and whether
U.S. President Donald Trump is going to sign a trade deal or
not."
    European share markets reached a four-year high as a new
extension granted by Washington to let U.S. companies keep doing
business with Chinese telecoms giant Huawei boosted bets that
the world's largest economies could reach a trade truce.      
    However, some uncertainty prevailed, after a report on
Monday suggested that the mood in Beijing was pessimistic about
the prospects of sealing an agreement.             
    Gold is also being pressured by a drop in oil prices, QCR's
Fertig said. Oil prices extended declines, pressured by an
expected rise in U.S. crude inventories.      
    The precious metal is often seen as a hedge against oil-led
inflation.
    Investors also awaited minutes from the U.S. Federal
Reserve's October policy meeting due on Wednesday.             
    The Fed cut rates three times this year - in part to offset
what it views as damage done by the tariff war. But after their
meeting in October, policymakers decided not to opt for rate
cuts unless the economy took a turn for the worse.
    Holdings of the SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, fell 0.6% to 891.79 tonnes on
Monday from Friday.          
    On the technical front, support for gold was around $1,450
while resistance lay around $1,470-$1,474, said Carlo Alberto De
Casa, chief analyst at ActivTrades.
    "In the short term, the trend (for gold) is still bearish
and for today we have a good chance of seeing gold closer to
$1,470."
    Elsewhere, silver        rose 0.5% to $17.10 per ounce,
while palladium        fell 0.2% to $1,735.00 per ounce.
    Platinum        advanced 0.5% to $898.07 per ounce.

 (Reporting by Asha Sistla in Bengaluru
Editing by Alexandra Hudson and Saumyadeb Chakrabarty)
  
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