Gold slides over 1% to one-month low on trade deal hopes
By K. Sathya Narayanan
Nov 7 (Reuters) - Gold slid more than 1% on Thursday to its lowest level in over a month as U.S. Treasury yields jumped and global equities markets cheered China and United States' agreement to cancel some tariffs in phases.
Spot gold XAU= was down 1.4% at $1,469.03 per ounce as of 11:03 a.m. EST (1603 GMT), having slipped to $1,467.71 its lowest since Oct. 1 earlier. U.S. gold futures GCcv1 fell 1.5% to $1,470.70.
"Postponing the China tariff deal was adding to uncertainties, but it seems that there is some agreement to remove some tariffs before year end... China has a weakening economy and needs to make a deal," said George Gero, managing director at RBC Wealth Management.
China and the United States have agreed to cancel, in phases, the tariffs imposed during their protracted trade war, the Chinese commerce ministry said, without specifying a timetable.
The news lifted Europe's share markets to a more than four-year peak and benchmark U.S. Treasury yields rose to their highest since early August, hurting bullion's safe-haven appeal. MKTS/GLOBUS/
Adding further pressure on the yellow metal was a firm dollar .DXY, which was at a three-week high against key rivals. USD/
Gold was also trading below its 100-day moving average of about $1,476 an ounce for the first time since May.
"Gold is in danger of breaking below its key recent range as trade optimism continues to drive a global risk-on rally move that is driving both global bond yields and the major indexes sharply higher," said Edward Moya, a senior market analyst at OANDA.
"Gold's longer-term bullish outlook should still be reasserting itself, but that might not happen until we see a major selloff that targets the $1,450 an ounce level."
The 16-month tit-for-tat tariff war between the world's two biggest economies is one of the key reasons that gold, a safe-haven asset during times of economic and political uncertainty, has jumped over 14% so far this year.
Bullion had also gained this year on the back of easing monetary policy by global central banks along with the Federal Reserve, which had slashed its benchmark interest rate for the third time this year.
The Fed's stance that there would be no further reductions in interest rates unless the economy takes a turn for the worse has also weighed on bullion, RBC's Gero said.
Among other precious metals, silver XAG= dipped 2.3% to $17.21 per ounce, after touching its lowest since Oct. 16.
Platinum XPT= fell 1.2% to $917.64 per ounce, while palladium XPD= gained 0.2% to $1,796.08 per ounce.
(Reporting by K. Sathya Narayanan in Bengaluru; Editing by Bernadette Baum)
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