PRECIOUS-Gold rises on weaker dollar; investors seek more clarity on trade talks

Stock prices increasing and decreasing in value Credit: Shutterstock photo

(Updates prices)

* Improved risk appetite limits gold's gains

* SPDR Gold holdings down 3 pct so far in Feb

By Karthika Suresh Namboothiri

Feb 13 (Reuters) - Gold prices inched up on Wednesday,supported by a weaker dollar on hopes of a deal between theUnited States and China over a long-drawn trade war, butimproved risk appetite capped bullion's gains.

Spot gold XAU= was up 0.1 percent to $1,312.36 per ounce,as of 0832 GMT, while U.S. gold futures GCv1 gained 0.1percent to $1,315.3 an ounce.

U.S. President Donald Trump said on Tuesday that he couldsee letting the March 1 deadline for reaching a trade agreementwith Beijing slide a little if the two sides were close tohammering out a deal to end their long-drawn trade tussle.

U.S. tariffs on $200 billion worth of imports from China arescheduled to rise to 25 percent from 10 percent if the two sidescannot reach a deal by the deadline, increasing pain and costsin sectors from consumer electronics to agriculture.

"There is very little detail behind some of those (Trump's)comments... There has been nothing really strong enough to driveany strong conviction (for investors)," said ANZ analyst DanielHynes.

However, improved risk appetite limited bullion's gains,with Asian stocks edging higher to a more than four-month peak. MKTS/GLOB

"The safe-haven buying that we saw earlier in the month isnow a little more fragile (after recent developments in tradetalks)," Hynes said.

The dollar index .DXY , however, suffered against its Asianpeers, and was steady at 96.8. It shed about 0.4 percent in theprevious session in its worst one-day loss in two weeks.

Many central banks have lowered their economic outlook and changed their attitude towards monetary policies, which hassupported gold, analysts at precious metals dealer Wing Fungsaid in a note.

New Zealand's central bank was the latest to retain thepossibility of a rate cut in the face of rising economic risks.

Investors were also worried after Trump said on Tuesday hewas unhappy with a deal struck by congressional negotiators onborder security that denied him funds for his U.S.-Mexicanborder wall.

Standing at $1,300, gold is getting support from a weakerdollar, but lacks enough momentum, Wing Fung said.

Meanwhile, holdings of SPDR Gold TrustGLD , the world'slargest gold-backed exchange-traded fund, fell 0.4 percent onTuesday. Holdings are down about 3 percent so far this monthafter four straight monthly gains.

ANZ's Hynes said January saw pretty good flows. "Some ofthose investors take profits and subsequently extract some ofthose holdings. I don't see it becoming a longer trade trend,"he said.

Spot palladium XPD= rose 0.4 percent to $1,409.00 perounce, after gaining 1.3 percent in the previous session - itsbest since Jan. 25.

Platinum XPT= dropped 0.1 percent to $786.00 per ounce,while silver XAG= traded steady at $15.71.

(Additonal reporting by Nallur Sethuraman in Bengaluru; Editingby Subhranshu Sahu and Rashmi Aich) ((; +91 80 67490997 (If within U.S. call 651-848-5832); Reuters

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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