December 3, 2019 / 5:40 AM / 6 days ago

PRECIOUS-Gold prices tread water despite Trump's Latam tariffs

 (Updates prices, adds comment and details)
    * SPDR Gold holdings down 0.7% on Monday, lowest since Sept.
19
    * Gold Specs cut bullish positions in week to Nov. 26 -CFTC

    By Sumita Layek
    Dec 3 (Reuters) - Gold prices were trading in a narrow range
on Tuesday as investors stayed on the sidelines, even as U.S.
President Donald Trump's move to slap tariffs on Brazil and
Argentina stoked fresh global trade tensions.
    Spot gold        was unchanged at $1,462.58 per ounce by
0803 GMT. U.S. gold futures         fell 0.1% to $1,468.20.
    Trump on Monday announced tariffs on U.S. steel and
aluminium imports from Brazil and Argentina "effective
immediately", opening new fronts in his trade war.             
    "Prices haven't risen because investment demand for gold is
not there," said Jigar Trivedi, a commodities analyst at
Mumbai-based Anand Rathi Shares & Stock Brokers.
     "In SPDR gold exchange-traded funds (ETF), flows have
reduced, investor demand has faltered and that's why prices have
not reacted to the trade uncertainties." 
    Holdings of the world's largest gold-backed ETF, SPDR Gold
Trust      , fell 0.7% to 889.16 tonnes on Monday, their lowest
since Sept. 19.          
    Speculators also cut their bullish positions in COMEX gold 
in the week to Nov. 26, data showed on Monday.        
    "People are expecting the U.S.-China trade war to
de-escalate, plus the U.S. Federal Reserve has signalled that
there will be no further rate cuts unless there is a U-turn in
the economy, so sentiment will be bearish (in gold)," Trivedi
said.
    The Fed has cut interest rates three times this year and is
due to meet on Dec. 10-11 for its next policy meeting.
    Trump on Monday said U.S. legislation backing protesters in
Hong Kong did not make trade negotiations with China easier, but
added he believes Beijing still wants a deal.             
    Gold has risen about 14% so far this year, mainly due to the
17-month-old trade dispute.
    "After strong Chinese manufacturing data, market is a bit
down on gold, and slowly gold prices should move in a downward
direction," said Vandana Bharti, assistant vice-president of
commodity research at SMC Comtrade.
     China's factory activity unexpectedly expanded at the
quickest pace in almost three years in November, a private
business survey showed on Monday.             
    On the technical front, "the metal continues to hold range
bound heading into year-end, seemingly well supported around
$1,450, however lacking any meaningful demand to break top-side
resistance through $1,465 - $1,470 and $1,480 the key level
above this," MKS PAMP said in a note.
    Elsewhere, palladium        was flat at $1,852.21 per ounce,
after scaling an all-time peak in the previous session at
$1,861.71. 
    Silver        rose 0.1% to $16.92, while platinum        was
unchanged at $897.97.

 (Reporting by Sumita Layek in Bengaluru; Editing by Sriraj
Kalluvila and Christian Schmollinger)
  
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