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Gold slips as trade tensions buoy dollar; U.S-China talks in focus

Reuters 

By N R

(Reuters) - Gold prices eased on Monday as uncertainties around U.S-trade tensions made the dollar buoyant, taking sheen off the metal's safe-haven appeal even as investors were worried about a slowdown in global economic growth.

Spot gold fell 0.2 percent to $1,311.22 per ounce by 0733 GMT, while U.S. gold futures declined 0.3 percent to $1,314.90 per ounce.

A vigorous dollar is acting as an impediment to gold in the near term, said Benjamin Lu, an with Singapore-based Phillip Futures, adding gold also faced a short-term negative bias in charts used by technical traders.

"But over a long-term perspective, we are quite bullish. Global growth worries, absence of positive signs in U.S-trade negotiations and reduction in the euro-zone growth forecasts have laid a strong foundation for gold."

Investors are looking ahead to trade talks between and this week with a delegation of U.S. officials travelling to for the next round of negotiations. U.S. said last week that he had no plans to meet with Chinese before a March 1 deadline to achieve a trade deal.

Trump has vowed to increase U.S. tariffs on $200 billion worth of Chinese imports if the two sides cannot reach a deal by 12:01 a.m. (0501 GMT) on March 2.

Trade tensions between the world's top two economies have rattled financial markets since last year and also boosted the appeal of the U.S. dollar as a safe-haven.

The dollar index touched its highest since Jan. 3, making the greenback-denominated gold more expensive for holders of other currencies.

The dollar's strength comes despite the Federal Reserve pausing its multi-year rate hike cycle and dovish stance exhibited by several Fed officials.

Gold touched a nine-month high at $1,326.30 in late January on a dovish Fed, but prices have since seen a correction.

While gold is supported by the Fed's policy, prices will likely remain range-bound until there is clarity on the trade front and shutdown, said in a note.

Talks on border security funding collapsed after Democratic and Republican lawmakers clashed over immigrant detention policy as they worked to avert another shutdown.

Spot gold may retest a support at $1,299 per ounce, as suggested by its wave pattern and a projection analysis, according to

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, saw outflows for five straight sessions last week.

Meanwhile, palladium fell 1.4 percent to $1,382.41 an ounce.

Spot silver dropped 0.5 percent to $15.75, while platinum was down 1.3 percent at $787.49

(Reporting by Nallur 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: Mon, February 11 2019. 13:08 IST
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