Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London, Britain. Picture: REUTERS/NEIL HALL
Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London, Britain. Picture: REUTERS/NEIL HALL

Bengaluru — Gold prices eased on Monday, extending falls for a third session as optimism surrounding US-China trade talks increased risk appetite, while a slight uptick in dollar also weighed on prices.

Spot gold dropped 0.2% to $1,485.86 per ounce as of 5.30am, having shed 1% in the previous week. Prices were set to decline for three consecutive daily sessions.

US gold futures inched up 0.1% to $1,490.20 per ounce.

“Gold is not moving on gold fundamentals, it is moving on whatever is going on with the trade situation,” Oanda analyst Jeffrey Halley said.

“The trade deal was short on detail, but is still going to be enough to probably support risk, and that will be negative for gold.”

US President Donald Trump on Friday outlined the first phase of a deal to end the protracted Sino-US trade war and suspended a threatened tariff hike, the biggest step by the two countries in 15 months.

Asian stock markets cheered the news, with MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.5%.

“The positive headline is encouraging. However, we saw the same move before in April…. This time may be different as timing could be the catalyst for both sides to go ahead with the talk without derailing the situation,” OCBC Bank said in a note referring to the US-China trade talks.

Singapore’s central bank eased monetary policy for the first time in three years on Monday, with the city-state’s economy narrowly dodging recession in the midst of the long-drawn trade war between the world’s two biggest economies.

Meanwhile, markets await Britain and the EU’s talks later in the day, ahead of a summit on Thursday and Friday. Both parties said that much more work would be needed to secure an agreement on Britain’s departure from the bloc, scheduled for October 31.

Gold is generally used by investors as a hedge against political and financial uncertainty.

“We remain optimistic on bullion prospects as central banks enact for monetary-policy easing programmes over looming downside risks in the global economy,” Phillip Futures analyst Benjamin Lu said in a note.

Among other precious metals, silver inched 0.1% higher to $17.55 per ounce and platinum climbed 0.3% to $892.09.

Palladium shed 0.3% to $1,693.29 an ounce, after hitting a record high of $1,705.84 on Friday.


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