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Gold rises on weak dollar; investors seek more clarity on U.S.-China trade talks

Reuters 

By Suresh Namboothiri

(Reuters) - Gold firmed slightly on Wednesday as investors held onto the safe-haven while seeking more clarity on Sino-U.S. trade talks, and as volatility in the dollar provided further support.

Spot gold was up 0.2 percent at $1,312.82 per ounce as of 0419 GMT, while U.S. gold futures gained 0.2 percent to $1,316.2 an ounce.

U.S. said on Tuesday that he could see letting the March 1 deadline for reaching a trade agreement with 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 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 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

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 marginally lower at 96.68. about 0.4 percent in the previous session in its worst one-day loss in two weeks.

"Any progress in the talks would likely weaken the dollar and elevate gold slightly from here," said

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.

Nevertheless, Trump said he did not expect another shutdown, while continuing to insist he could find a way to bypass and build a wall without lawmakers.

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.

rose 0.5 percent to $1,410.50 per ounce, after gaining 1.3 percent in the previous session - its best since Jan. 25.

Platinum was unchanged at $786.50 an ounce, while silver fell 0.1 percent to $15.69.

(Additonal reporting by Nallur Sethuraman in Bengaluru; Editing by Subhranshu Sahu)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, February 13 2019. 09:56 IST
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