Gold slips from one-week peak on trade deal prospects
By K. Sathya Narayanan
Oct 10 (Reuters) - Gold prices fell from a one-week high on Thursday after a Chinese state media report suggested that China wants to reach an agreement with the United States to avoid any escalation in a protracted trade row, soothing investor concerns.
Spot gold XAU= fell 0.7% to $1,494.51 per ounce, as of 10:50 a.m. EDT (1450 GMT), having hit a one-week peak early in the session. U.S. gold futures GCcv1 were down 0.9% at $1,499.20.
"It is all about the tariffs. It is the he-said-she-said that whips the market back and forth. Right now you have the short term traders selling gold on the tariff news," said Michael Matousek, head trader at U.S. Global Investors.
Chinese Vice Premier Liu He said that Beijing is willing to reach an agreement with the Washington on matters both sides care about, China's Xinhua state news agency reported.
Earlier in the session, gold rose to $1,516.77 - its highest since Oct. 3 - on a report that the Chinese delegation was planning to leave Washington after just a day of minister-level meetings, a day earlier than expected.
Trade talks between the two countries started on Thursday.
Markets have been on edge for weeks over the U.S.-China trade tensions and recent data has pointed to further weakening in global growth.
If negotiations break down again, nearly all Chinese goods imports into the United States - more than $500 billion - could be subject to punitive tariffs by Dec. 15.
"The major concern is that there is nothing going to come out of these negotiations, just kick the can further down the road," said Daniel Pavilonis, senior market strategist at RJO Futures.
"So, if there is some type of an agreement, depending on what type of agreement it is, you would probably see a gold sell-off, at least that would be the initial reaction," Pavilonis said, adding "gold and silver, from a technical standpoint, look pretty bullish."
Bullion is often used by investors as a hedge against political and financial uncertainty and has risen nearly 18% since hitting this year's low of $1,265.85 in May, predominantly on trade tensions, dovish monetary policy by major central banks and gloomy economic growth outlook.
Among other precious metals, silver XAG= fell 1% to $17.52 per ounce.
Palladium XPD= rose 1% to $1,698.92, while platinum XPT= eased 0.2% to $890.29 an ounce.
(Reporting by K. Sathya Narayanan in Bengaluru; Editing by Nick Macfie)
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