February 13, 2019 / 4:28 AM / 5 days ago

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

(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 the United States and China over a long-drawn trade war, but improved risk appetite capped bullion’s gains.

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

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

U.S. tariffs on $200 billion worth of imports from China are scheduled to rise to 25 percent from 10 percent if the two sides cannot reach a deal by the deadline, increasing pain and costs in 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 drive any strong conviction (for investors),” said ANZ analyst Daniel Hynes.

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

“The safe-haven buying that we saw earlier in the month is now a little more fragile (after recent developments in trade talks),” Hynes said.

The dollar index, however, suffered against its Asian peers, and was steady at 96.8. It shed about 0.4 percent in the previous 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 has supported gold, analysts at precious metals dealer Wing Fung said in a note.

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

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

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

Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.4 percent on Tuesday. Holdings are down about 3 percent so far this month after four straight monthly gains.

ANZ’s Hynes said January saw pretty good flows. “Some of those investors take profits and subsequently extract some of those holdings. I don’t see it becoming a longer trade trend,” he said.

Spot palladium rose 0.4 percent to $1,409.00 per ounce, after gaining 1.3 percent in the previous session - its best since Jan. 25.

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

Additonal reporting by Nallur Sethuraman in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich

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