Picture: REUTERS
Picture: REUTERS

Bengaluru — Gold edged off an early two-week low on Tuesday as cautious traders awaited further developments in the trade negotiations between the US and China, though a firm equities market kept a lid on bullion’s gains.

Spot gold was up 0.2% at $1,457.58 an ounce at 10.46am GMT, having earlier touched its lowest since November 12 at $1,451.15. US gold futures edged 0.1% higher to $1,457.50.

“We are stuck in a relatively tight range between $1,450 and $1,475 and are basically just awaiting further developments [in trade talks],” said Saxo Bank commodity strategist Ole Hansen. “There is some fatigue in the market. Yes, [the US and China] are talking, and yes, they are trying to give a positive spin to it, but we’re still missing the actual deal.”

World stocks hit their highest in almost two years following fresh signs that the US and China were working to end a bitter trade war that has dealt a blow to the global economy. Gold, considered a safe asset in times of political and economic uncertainty, has gained more than 13% in 2019, mainly due to the tariff dispute and its impact on global economic growth.

Chinese vice-premier Liu He, US trade representative Robert Lighthizer and US treasury secretary Steven Mnuchin discussed issues related to phase one of a trade deal and agreed to maintain communication on remaining issues.

“We’re now back around the $1,440-1,460 support zone,” Craig Erlam, Oanda senior market analyst, said in a note. “A break of this would be very significant and could potentially open up a move back towards the $1,400 area.”

Meanwhile, US Federal Reserve chair Jerome Powell said on Monday that officials have a favourable outlook on the US economy. However, weak global growth and trade uncertainty are holding back expansion and they will “respond accordingly” if economic data leads to a “material reassessment” of their outlook.

The US Fed cut interest rates three times in 2019 before pausing. Lower rates reduce the opportunity cost for holders of bullion, an asset that yields no interest. Investors’ focus is now on the US consumer confidence data due at 3pm GMT.

In other metals, silver was up 0.2% at $16.93 an ounce. Palladium was down 0.4% to $1,790.47 an ounce, having earlier hit its highest since November 4 at $1,818.54, and platinum gained 0.2% to $898.71.