Bengaluru — Gold prices edged higher on Wednesday, after falling over 1% in the previous session, as investors took a step back from riskier assets in the absence of concrete developments on the US-China trade front.

Spot gold rose 0.1% to $1,485.73/oz at 5am GMT. On Tuesday, prices registered their biggest one-day percentage drop since late-September, at 1.7% due to a stronger dollar and higher bond yields.

US gold futures were up 0.2% at $1,487.40/oz.

“Equities are off a little bit, bonds yields are also down, these factors are helping gold,” AxiTrader market strategist Stephen Innes said, adding there was also some short-covering.

Asian shares pulled back slightly as some investors started to temper their optimism in the absence of concrete progress in negotiations between the world’s two-largest economies on scaling back their bruising trade war.

Yields on the benchmark 10-year notes were down, having risen to their highest since September 16 in the last session, while the dollar index eased against major currencies .

Lower bond yields reduce the opportunity cost of holding non-yielding gold and weigh on the dollar, making bullion cheaper for non-US investors.

“It really looks like the [gold price] momentum is carrying downwards based on the trade talks rhetoric, which seems to be constantly bettering,” Innes said.

Optimism that Washington and Beijing are working to narrow their differences enough to sign a “phase one” trade deal as early as this month has boosted risk sentiment in financial markets and weighed on gold in the past two sessions.

US data on Tuesday showed better-than-expected ISM non-manufacturing data for October, which eased some fears of global economic slowdown.

“Should gold finally break the $1,480.00 region convincingly, we may see some long position liquidation,” said Oanda analyst Jeffrey Halley.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.13% to 915.85 tons on Tuesday from 914.67 tons on Monday.

Among other metals, silver was flat at $17.58/oz, while platinum was down 0.6%, to $923.00/oz. Palladium inched 0.3% lower to $1,773.04/oz.