November 14, 2019 / 4:57 PM / a month ago

PRECIOUS-Gold rises on waning trade deal hopes and dip in equities, dollar

 (Recasts, adds comments, updates prices)
    * China's industrial production growth slows sharply in Oct
    * Permanent truce in trade war unlikely over the coming year
-poll
    * GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl 

    By Asha Sistla and K. Sathya Narayanan
    Nov 14 (Reuters) - Gold prices rose on Thursday as investors
remained concerned about the imminence of a trade deal between
the United States and China, while a slip in riskier assets and
the U.S. currency further supported the metal.
    Spot gold        rose 0.7% to $1,472.66 per ounce as of
02:05 p.m. EST (1905 GMT). U.S. gold futures         settled up
0.7% at $1,473.40 per ounce.
    "There were some concerns about the 'phase one' agreement as
there seemed to be some sticking points on agricultural
products. As a result we did see a little new wave of buying (in
gold)," said David Meger, director of metals trading at High
Ridge Futures.
    The trade negotiations have hit a snag over farm purchases,
with China not wanting a deal that looks one-sided in the favor
of the United States, the Wall Street Journal reported on
Wednesday.             
    Economists polled by Reuters said the United States and
China were unlikely to reach a permanent truce over the coming
year, and while concerns have eased over a U.S. recession, an
economic rebound is also not expected any time soon.
            
    "The dollar being a bit weaker against major currencies
along with the equity markets turning off from recent highs,
both of those are additional, auxiliary, factors as to why gold
and silver are higher," Meger added.
    Equities worldwide, Treasury yields and the U.S. dollar fell
because of an assortment of weak economic data from around the
globe, which added to worries regarding the slowdown in the 
global economy.                         
    China's factory output growth slowed more than expected in
October, and Japan's economy ground to a near standstill in the
third quarter as a result of the trade war and softer global
demand, while Germany narrowly avoided slipping into recession
in the third quarter.                                        
    "Gold should be in greater demand at least in the short term
because the negotiations of a partial agreement in the trade
dispute between the U.S and China appear to have stalled,"
Commerzbank analyst Daniel Briesemann said in a note.
    The trade war and dovish global central banks have pushed
gold prices more than 14% higher so far this year.
    Meanwhile, Federal Reserve Chair Jerome Powell on Wednesday
said that the impact of three rate cuts this year is still to be
fully felt and no further cuts will occur unless there is a
"material" change in the economic outlook.             
    Investors have read that to mean interest rates, to which
gold is highly sensitive to, may be on hold until late next
year. 
    Among other precious metals, palladium        gained 1.6% to
$1,736.69 per ounce. Silver        rose 0.6% to $17.05 per
ounce, while platinum        was up 0.9% at $881.34 per ounce.

 (Reporting by Asha Sistla and K. Sathya Narayanan in Bengaluru
Editing by Matthew Lewis and Steve Orlofsky)
  
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