July 1, 2019 / 1:36 AM / in 18 days

PRECIOUS-Gold slips to 1-week low as U.S.-China trade optimism lifts risk sentiment

July 1 (Reuters) - Gold prices fell more than 1% on Monday, their lowest in a week, as hopes of a trade deal between the United States and China improved risk appetite, while a stronger dollar further weighed on prices.

FUNDAMENTALS

* Spot gold was down 1.1% at $1,393.16 per ounce as of 0109 GMT, after falling to its lowest level since June 21 at $1,390.83.

* U.S. gold futures slipped 1.1% to $1,398.50 an ounce.

* The United States and China agreed on Saturday to restart trade talks after President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei in order to reduce tensions with Beijing

* Also, China agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table.

* China and the United States will face a long road before they can reach a deal to end their bitter trade war, with more fights ahead likely, Chinese state media said after the two countries’ presidents held ice-breaking talks in Japan.

* Trump had threatened to slap new levies on roughly $300 billion of additional Chinese goods, including popular consumer products, if the meeting in Japan proved unsuccessful.

* Stocks rallied and bonds retreated in Asia on Monday as a thaw in the Sino-U.S. trade dispute tempered risks to the global economy, leading investors to pare wagers on aggressive policy easing by the major central banks.

* Meanwhile, the dollar index gained 0.2% against basket of major currencies.

* Hedge funds and money managers boosted their bullish stance in COMEX gold in the week to June 25, the U.S. Commodity Futures Trading Commission said on Friday.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.22% to 794.04 tonnes on Friday from 795.80 tonnes on Thursday.

DATA AHEAD (GMT)

* 0030 Japan Nikkei Mfg PMI June

* 0800 Euro Zone Markit Mfg Final PMI June

* 0830 UK Markit/CIPS Mfg PMI June

* 0900 Euro Zone Unemployment Rate May

* 1345 US Markit Mfg PMI Final June

* 1400 US ISM Manufacturing PMI June (Reporting by Brijesh Patel in Bengaluru; editing by Uttaresh.V)

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