December 19, 2019 / 11:35 AM / a month ago

PRECIOUS-Gold eases as trade optimism offsets U.S. political uncertainty

 (Updates prices)
    * U.S. Senate widely expected not to remove Trump from
office
    * Gold range-bound in $1,465-$1,480 level- analyst
    * China unveils new list of tariff exemptions on U.S. goods
    * SPDR Gold Trust holdings rise

    By Eileen Soreng
    Dec 19 (Reuters) - Gold eased on Thursday as optimism
surrounding U.S.-China trade ties offset support from political
uncertainty stemming from the U.S. House of Representatives'
vote to impeach President Donald Trump. 
    Spot gold        dipped 0.1% to $1,474.34 per ounce as of
1326 GMT. U.S. gold futures         were unmoved at $1,478.20.
    "We do have optimism over the phase one trade deal," said
FXTM analyst Lukman Otunuga. 
    "Until we have anything new in the picture, gold is going to
continue trading within a tight range ... Resistance (lay)
around the $1,480 level and support around $1,465." 
    China on Thursday announced a new list of import tariff
exemptions for six chemical and oil products from the United
States, days after the world's two largest economies announced
an interim trade deal.             
    Until all existing tariffs are fully rolled back, concerns
about slowing global growth are going to remain a major theme
supporting gold prices, Otunuga added. 
    The tariff dispute has weighed on economic growth worldwide
and hurt business investment and confidence, largely fuelling
bullion's near 15% rise this year. 
    Investors also kept a close eye on political proceedings in
Washington, where the Democratic-led House of Representatives
formally charged Trump with abuse of power and obstruction of
Congress in a historic step that will inflame partisan tensions
across a deeply divided America.             
    However, the Republican-controlled Senate is widely expected
not to convict Trump and remove him from office.
    If the U.S. Senate convicts Trump, "which would be
unexpected, that throws next year's election into a very
uncertain place," Ilya Spivak, a senior currency strategist at
DailyFx said, adding the resultant aversion towards riskier
asset could benefit gold.
    The yellow metal is often seen as an alternative investment
during times of political and financial uncertainty.
    Although the reaction to the impeachment was largely muted,
world stocks drifted down from the week's record highs, while
the U.S. dollar        eased slightly against a basket of
currencies.                   
    Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust      , rose 0.3% to 883.29 tonnes on
Wednesday.          
    Elsewhere, palladium        was flat at $1,922.63 an ounce.
Prices of the autocatalyst metal hit an all-time peak of
$1,998.43 on Tuesday, within a whisker of breaking above $2,000
for the first time due to a gaping supply deficit.             
    Silver        was down 0.2% at $16.97 per ounce, while
platinum        slipped 0.5% to $930.75.

 (Reporting by Eileen Soreng in Bengaluru; editing by David
Evans and Alexandra Hudson)
  
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