December 4, 2019 / 11:37 AM / 3 days ago

PRECIOUS-Gold steadies as investors await clarity on U.S.-China trade

 (Adds comments, details; updates prices)
    * U.S. and China closer to agreeing tariff rollback -report 
    * European shares recover some ground
    * Platinum could rise to about $1,000/oz in 2020 -UBS 
    * GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl

    By Diptendu Lahiri
    Dec 4 (Reuters) - Gold steadied on Wednesday, hovering near
a one-month high as investors awaited clarity on U.S.-China
trade talks, while palladium soared to a record high on scarce
supply.
    Spot gold        was little changed at $1,477.65 an ounce at
1250 GMT, having touched its highest since Nov. 7 at $1,484,
while U.S. gold futures         were down 0.1% at $1,483.30.
    Washington and Beijing are moving closer to agreeing on the
amount of tariffs to be rolled back in a so-called Phase 1 trade
deal, Bloomberg reported on Wednesday, citing sources.
            
    "Investors are cautious about what would happen if we don't
have a deal on Dec. 15, given the headlines we've been seeing in
the past couple of weeks," said ING analyst Warren Patterson.
    A further 15% U.S. tariff on about $156 billion of Chinese
imports is due to take effect on Dec. 15. 
    "The to and fro direction in the progress of the trade war
has whipsawed gold markets," Patterson said, adding that the
effects of headlines on prices will grow more intense as Dec. 15
approaches.
    European stocks recovered some of the previous session's
losses on U.S. President Donald Trump's warning that a deal with
China might have to wait until after the U.S. presidential
election next November.            
    Trump had also slapped tariffs on U.S. steel and aluminium
imports from Brazil and Argentina.                          
    Safe-haven gold has risen about 15% this year, mainly on the
back of the 17-month trade dispute. But this month it has been
trading in a $1,444-$1,478 range, which was broken on Tuesday.
    The U.S. House of Representatives, meanwhile, approved a
bill that would require Washington to toughen its response to
China's crackdown on its Uighur Muslim minority, which investors
fear could threaten trade ties.                          
    Elsewhere, palladium        was down 0.1% at $1,854.31 an
ounce after hitting a fifth record high within a month, peaking
at $1,868.69.
    "We continue to think that palladium price increases are not
justified by the fundamentals and that prices will fall back,"
ABN-AMRO analysts said in a note.
    ABN-AMRO forecasts prices to be at $1,450 an ounce by the
end of next year and $1,500 by the end of 2021.
    Platinum        rose 0.5% to $914.24 and silver        was
little changed at $17.15.
    While the platinum market is expected to be oversupplied in
2020, it should latch on to gold and still trade up to about
$1,000 an ounce next year, UBS analysts said in a note.

 (Reporting by Diptendu Lahiri and Asha Sistla in Bengaluru
Editing by Louise Heavens and David Goodman)
  
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