Gold price remains below one-month peak as shares soar on trade relief
New York (Dec 13) - Gold prices edged higher on Friday as the dollar sagged, but prices held below last session's one-month high after reports the United States and China were close to signing a trade deal fuelled a rally in stock markets.
Spot gold was up 0.1% at $1,470.53 per ounce at 1053 GMT, and has risen about 0.8% so far this week. U.S. gold futures were up 0.2% at $1,474.70.
"Now that the phase one (trade) deal seems like sealed ... investors are not so optimistic about the more complex phase two of the deal and that is and will keep gold supported," said Carlo Alberto De Casa, chief analyst at ActivTrades.
The United States has offered to cut existing tariffs on Chinese goods by as much as 50% and suspend new tariffs scheduled to go into effect on Sunday in an attempt to secure a "Phase One" trade deal, sources told Reuters on Thursday.
"Until the U.S.-China trade deal gets signed and closed, uncertainty will persist in the market," said Ajay Kedia, director at Kedia Advisory in Mumbai.
Spot gold prices rose to their highest since Nov. 7 on Thursday, but settled lower after the trade deal reports.
The dollar was hovering close to its lowest since early July, putting a floor under gold prices.
Trade optimism lifted Wall Street to record highs, while European stock markets were within striking distance of an all-time high on Friday after Britain's Prime Minister Boris Johnson won a resounding election victory.
Share markets cheered that Johnson's victory will allow him to end three years of political paralysis and take Britain out of the European Union by Jan. 31. Bullion denominated in British sterling slid 1.5% to 1,085.01 pounds an ounce, its lowest since June. Elsewhere, palladium rose 2% to $1,969.28 an ounce, having notched up an all-time high of $1,979.85.
Plagued by a supply deficit, the metal has gained about 5% so far this week, predominantly supported by mine closures across major producer South Africa.
Platinum fell 0.6%, to $938.17 per ounce, but was on track to post its best week since the end of August.
Silver was up 0.1% at $16.95 and was set to record its best weekly gain since the end of October.
Reuters
