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Gold slips as fresh hopes for U.S.-China deal boosts equities

Credit: REUTERS/LEONHARD FOEGER

Gold fell on Tuesday, erasing gains from earlier in the session, as a temporary reprieve from Washington for China's Huawei rekindled optimism for a trade deal between the countries and boosted risk sentiment.

* European share markets hit four-year high

* U.S. Fed minutes due on Wednesday

* Support for gold around $1,450 - analyst

* SPDR gold holdings fall 0.6% on Monday (Updates prices)

By Asha Sistla

Nov 19 (Reuters) - Gold fell on Tuesday, erasing gains from earlier in the session, as a temporary reprieve from Washington for China's Huawei rekindled optimism for a trade deal between the countries and boosted risk sentiment.

Spot gold was down 0.2% to $1,467.78 per ounce at 1228 GMT, reversing course from Asian trading hours, when prices rose to their highest since Nov. 7 at $1,475.40.

U.S. gold futures fell 0.3% to $1,468.10 per ounce.

"Stock markets are up, investors are less risk averse and prefer more risky assets against safe havens and that is also a factor (affecting gold)," Quantitative Commodity Research analyst Peter Fertig said.

"Gold is following closely the statements from the U.S. administration concerning negotiations with China and whether U.S. President Donald Trump is going to sign a trade deal or not."

European share markets reached a four-year high as a new extension granted by Washington to let U.S. companies keep doing business with Chinese telecoms giant Huawei boosted bets that the world's largest economies could reach a trade truce. [.EU]

However, some uncertainty prevailed, after a report on Monday suggested that the mood in Beijing was pessimistic about the prospects of sealing an agreement.

Gold is also being pressured by a drop in oil prices, QCR's Fertig said. Oil prices extended declines, pressured by an expected rise in U.S. crude inventories. [O/R]

The precious metal is often seen as a hedge against oil-led inflation.

Investors also awaited minutes from the U.S. Federal Reserve's October policy meeting due on Wednesday.

The Fed cut rates three times this year - in part to offset what it views as damage done by the tariff war. But after their meeting in October, policymakers decided not to opt for rate cuts unless the economy took a turn for the worse.

Holdings of the SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.6% to 891.79 tonnes on Monday from Friday. [GOL/ETF]

On the technical front, support for gold was around $1,450 while resistance lay around $1,470-$1,474, said Carlo Alberto De Casa, chief analyst at ActivTrades.

"In the short term, the trend (for gold) is still bearish and for today we have a good chance of seeing gold closer to $1,470."

Elsewhere, silver rose 0.5% to $17.10 per ounce, while palladium fell 0.2% to $1,735.00 per ounce.

Platinum advanced 0.5% to $898.07 per ounce. (Reporting by Asha Sistla in Bengaluru Editing by Alexandra Hudson and Saumyadeb Chakrabarty) ((Asha.Sistla@thomsonreuters.com; If within U.S. +1 646 223 8780; outside U.S. +91 80 6749 5072; Reuters Messaging: Reuters Messaging: asha.sistla.thomsonreuters.com@reuters.net)) Keywords: GLOBAL PRECIOUS/ (UPDATE 4)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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