Gold prices eased on today and were hovering close to a two-week low touched in the previous session as increasing signals that an interim trade deal could be reached soon buoyed riskier assets and the U.S. dollar.
Spot gold fell 0.1% to $1,459.10 per ounce. U.S. gold futures also shed 0.1% to $1,459.20.
“The decline of today is relatively small and can be seen as a consolidation after yesterday’s recovery,” said Carlo Alberto De Casa, chief analyst at ActivTrades, adding that rising share prices and a recovering dollar were relatively bearish for gold.
“What’s important is that prices are holding above $1,450… If prices fall below $1,445, then there will be a clear signal that we are entering a danger zone,” De Casa said, adding the markets are waiting for further details on the trade talks.
U.S. President Donald Trump on Tuesday said Washington was in the “final throes” of a deal that would defuse the 16-month tariff dispute with Beijing.
Expectations for an imminent closure to the long-drawn trade dispute encouraged world shares to make another push for a record high on Wednesday and supported the U.S. dollar against its key rivals.
Any increase in appetite for risk-bearing assets tends to weigh on safe-havens such as gold and yen, while a strong U.S. currency makes greenback-denominated bullion costlier for investors holding other currencies.
But market participants were still wary that bills passed by the United States supporting anti-government protesters in Hong Kong could complicate negotiations.
“Overall though, gold remains in the doldrums, entirely at the mercy of movements in other markets,” Jeffrey Halley, senior market analyst, Asia Pacific at OANDA said in a note.
“Critical support remains at $1,445 an ounce with formidable technical resistance remaining at $1,480 an ounce. Gold is adrift, with neither sail nor a following breeze, between these levels.”
Investors were also awaiting the Fed’s Beige Book of economic conditions among other data due later in the day.
The U.S. central bank had cut the benchmark rates for the third times this year before signalling a pause, adding another cut would be unlikely unless there was a downturn in the economy.
Elsewhere, silver shed 0.2% to $17.04 per ounce.
Palladium fell 0.6% to $1,799.59 an ounce, having surged to a three-week high on Tuesday, while platinum was down 0.5% to $903.31.
CNBC
