Gold granulate is seen at a plant of gold refiner and bar manufacturer Valcambi in the southern Swiss town of Balerna. Picture: REUTERS/MICHAEL BUHOLZER
Gold granulate is seen at a plant of gold refiner and bar manufacturer Valcambi in the southern Swiss town of Balerna. Picture: REUTERS/MICHAEL BUHOLZER

Bengaluru — Gold prices fell on Monday as Asian stocks touched 19-month highs ahead of the planned signing of an interim trade deal between Washington and Beijing.

Spot gold dipped 0.4% to $1,556.40 per ounce by 6.21 am SA time. US gold futures fell 0.2% to $1,557.10.

Asian shares rose to new 19-month highs ahead of a first-phase deal due to be signed at the White House on Wednesday.

“Risk looks pretty good in Asia, equity inflows are coming out nice built around this trade narrative and that’s depressing gold more than the global risk-on move,” Stephen Innes, a market strategist at AxiTrader said. “There is dollar appetite in the market … which is also depressing gold right now.”

US treasury secretary Steven Mnuchin said on Sunday, China’s commitments in the first-phase trade deal with US were not changed during a lengthy translation process and will be released this week.

Further easing concerns, a Wall Street Journal report read on Saturday, Washington and Beijing have agreed to semi-annual talks aimed at pushing for reforms in both countries and resolving disputes.

Gold prices had gained 18% last year on the backdrop of a protracted trade tussle. The dollar firmed ahead of the trade deal signing, making gold more expensive for buyers using other currencies.

Gold prices gained nearly 0.7% last week in volatile trading amid heightened US-Iran tensions after the US killing of a top Iranian commander in Baghdad and on slower-than-expected US job growth in December. The US imposed more sanctions on Iran on Friday and vowed to tighten the economic screws if Tehran continued “terrorist” acts or pursued a nuclear bomb.

“The precious metal though easing off previous-highs over de-escalating tensions (US-Iran) will remain of key importance, as markets stay cautious over geopolitical happenings in the current term,” Benjamin Lu, an analyst at Phillip Futures said in a note.

Spot gold is biased to break a support at $1,546 per ounce and fall towards $1,524, according to Reuters technical analyst Wang Tao.

Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.9% to 874.52 tons on Friday, their lowest since September 16.

Speculators increased their bullish positions in Comex gold contracts in the week to January 7.

Elsewhere, palladium remained unchanged at $2,117.60 an ounce. Silver was down 0.2% to $18.05, while platinum slipped 0.3% to $975.44.


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