Picture: 123RF/Ronnarong Thanuthattaphong
Picture: 123RF/Ronnarong Thanuthattaphong

Bengaluru — Gold slipped to an over one-week low on Tuesday as strength in equities markets and hopes for a smooth signing of the US-China phase 1 trade deal tarnished bullion's safe-haven appeal, while palladium rose to a record high.

Spot gold dipped 0.3% to $1,543.91/oz by 10.43am GMT. Earlier, prices fell to their lowest since January 3 at $1,535.63/oz. US gold futures dropped 0.4% to $1,544.60/oz. “As long as the stocks continue to make these record highs, there is no real need for the insurance policies you'll find in gold,” Saxo Bank analyst Ole Hansen said.

“We have got the signing of the trade deal ... we probably are not going to see anyone rocking the boat at this stage but nevertheless it'll give the market an opportunity to read the text and see what is in the deal.”

On Monday, just a day before the phase 1 trade deal signing, the US treasury dropped China's designation as a currency manipulator, fuelling market optimism.

“In the current market environment, characterised as it is by high risk appetite among market participants, gold is not in demand. The news backdrop at present is not conducive to rising gold prices, and is more likely to cause the correction to continue,” Commerzbank analysts wrote in a note.

Bullion rose to a near seven-year high last week on worries regarding the US-Iran conflict but the rally was short lived in the absence of any further escalation in tensions. Analysts say investors are still taking some profits following that huge spike in prices. “That has also been noted in the exchange-traded funds market where there has been some quite sizeable reductions since we reached that high,” Saxo Bank's Hansen said.

Also on investors' radar was the US Federal Reserve's Beige Book of economic conditions due on Wednesday.

Palladium hit a record high of $2,150.83/oz and was on track for a ninth straight session of gains supported by a sustained supply deficit. The metal, widely used in making of catalytic converters used in exhaust systems of vehicles, was up 0.7% to $2,146.45/oz.

Elsewhere, silver was down 1% at $17.78/oz, having hit its lowest since December 24 at $17.64/oz earlier in the session, while platinum fell 0.5%, to $969.21/oz.