A man holds necklaces in a gold shop in Chinatown in Bangkok, Thailand. Picture: REUTERS/SOE ZEYA TUN
A man holds necklaces in a gold shop in Chinatown in Bangkok, Thailand. Picture: REUTERS/SOE ZEYA TUN

Bengaluru — Gold prices were little changed on Tuesday, hovering about the $1,490/oz level as progress in China-US trade talks sent equities soaring, while anticipation ahead of central bank meetings in the week provided some support.

Spot gold was flat at $1,491.79 an ounce as of 3.20am GMT, after shedding nearly 1% in the previous session. US gold futures dropped 0.1% to $1,494.10 an ounce.

US President Donald Trump said on Monday he expected to sign a part of the trade deal with China ahead of schedule.

Furthermore, the US trade representative office, the lead US trade agency, said there could be an extension on tariff suspensions on $34bn of Chinese goods set to expire on December 28.

Wall Street jumped to a new peak after the statements on Monday, while Asian shares scaled a three-month high in early trade on Tuesday.

“There is a broad risk-on sentiment, with US equities hitting a fresh record high. The trade talks are unpredictable. It has disappointed investors many times in the past and may repeat again,” said Margaret Yang Yan, a market analyst at CMC Markets.

“The market is positive about it right now, but that also means it is vulnerable.”

Gold was far from losing its sheen, analysts said, as a dearth of clarity on trade talks and Britain’s divorce from the EU still loomed large.

The EU agreed to a Brexit delay of up to three months, but Brexit hangs in the balance, with British politicians still arguing over how, when or even whether the divorce should take place.

Investors braced for another dose of policy stimulus from the US Federal Reserve this week, where it is expected to cut rates for a third time in a row when it concludes its two-day meeting on Wednesday.

Central banks in Japan and Canada are scheduled for policy meetings this week, with the former leaning towards keeping monetary policy steady.

Lower interest rates make gold attractive as it reduces the opportunity cost of holding the metal.

Among other precious metals, palladium was slightly lower at $1,799.50 an ounce, not far from a record high of $1,808.81 hit in the previous session, as supply concerns continue boosting the autocatalyst metal’s appeal.

Silver fell 0.3% to $17.80 an ounce and platinum shed 0.6% to $913.29 an ounce.

Reuters