November 25, 2019 / 4:08 AM / 21 days ago

PRECIOUS-Gold slips as trade deal optimism boosts riskier assets

    * Speculators raise bullish bets on COMEX gold, silver
    * Spot gold may test support at $1,455/oz- technicals
    * Palladium hits over two-week high

 (Updates prices, adds comment and details)
    By Sumita Layek
    Nov 25 (Reuters) - Gold fell to a one-week low on Monday
after the United States and China expressed willingness to sign
an initial trade deal by the year-end, lifting demand for
riskier assets and boosting the dollar.
    Spot gold        eased 0.2% to $1,459.16 per ounce by 0728
GMT, having earlier fallen to its lowest since Nov. 18. U.S.
gold futures         fell 0.3% to $1,459.
    "Trade optimism is sending global equities higher and
capital is fleeing away from safe havens into risk assets," said
Margaret Yang Yan, a market analyst at CMC Markets.
    Upbeat headlines about trade talks between Washington and
China helped Asian shares regain footing, while the dollar
       rose, making bullion expensive for holders of other
currencies.                                            
    The U.S. currency rebounded strongly on Friday after a
survey showed the U.S. manufacturing output accelerated in
November and services activity picked up more than expected.
            
    "U.S. economic data has shown signs of stabilisation
recently ... also consensus is that the global slowdown is going
to bottom in the first quarter of next year and then start to
rebound," Yan said.
    Gold, considered a safe asset in times of political and
economic uncertainty, has gained over 13% this year, mainly due
to the tariff dispute and global economic concerns.
    "Prices can fall below $1,400 if a 'phase 1' trade deal is
signed. However, we can get a clear direction only after the
first phase is completed," said Hareesh V, head of commodity
research at Geojit Financial Services. 
    Investors were still cautious on trade talks with U.S. and
Beijing officials saying an ambitious "phase two" trade deal
looked less likely.             
    "U.S. economic data will likely factor a lot into gold
traders' decision making into year-end as will the ebb and flow
of trade talks. But ultimately, it's all about the (U.S. Federal
Reserve) Fed policy, U.S. interest rates and the dollar,"
AxiTrader market strategist Stephen Innes said in a note.
    Lower interest rates reduce the opportunity cost for holding
the non-yielding bullion.
    Speculators increased their bullish positions in COMEX gold
and silver contracts in the week to Nov. 19.        
    Spot gold may test a support at $1,455 per ounce, a break
below which could cause a fall to $1,440, according to Reuters
technical analyst Wang Tao.         
    Elsewhere, silver        dipped 0.6% to $16.90 per ounce,
after touching its lowest in a week.
    Palladium        rose 0.7% to $1,787.93 per ounce, having
earlier hit its highest since Nov.8, and platinum        gained
0.3% to $893.62.

 (Reporting by Sumita Layek in Bengaluru; Editing by Subhranshu
Sahu and Aditya Soni)
  
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