Gold steadies ahead of US Fed minutes, trade talks

Singapore (Oct 9) - Gold held steady on Wednesday on uncertainty over U.S.-China trade talks and Britain's exit from the European Union, ahead of minutes from the U.S. Federal Reserve's September meeting, which could shed light on future interest rate cuts.

Spot gold eased 0.2% to $1,502.82 per ounce as of 0932 GMT, and held above the key $1,500 level after rising as much as 1% in the previous session. U.S. gold futures gained 0.3% to $1,508.10 per ounce.

The United States on Tuesday imposed visa restrictions on Chinese officials for the detention or abuse of Muslim minorities ahead of high-level trade talks on Thursday.

U.S. President Donald Trump has said tariffs on Chinese imports will rise on Oct. 15 if no progress is made in the negotiations.

"The initiatives to block U.S. investors from investing into Chinese companies or limiting Chinese companies in the U.S. markets, all that is signalling that there is no clear line whether the U.S. wants a trade agreement with China," said Quantitative Commodity Research analyst Peter Fertig.

Investors are now awaiting the U.S. Federal Open Market Committee's minutes from its September meeting at 1800 GMT for clues on further monetary policy easing.

The dollar fell against rivals, making bullion cheaper for holders of other currencies. However, limiting bullion's upside, European stocks rose on upbeat corporate earnings but sentiment remained fragile ahead of critical trade talks and doubts over Britain's smooth EU exit.

"The risk is really quite high that the current UK government is steering towards a hard Brexit ... and in such a situation the investors seek safe haven and one of them is gold," Fertig said, adding prices could touch $1,550 or $1,600 in case of a harder Brexit.

However, a report in The Times newspaper said the European Union is ready to make a "major concession" on a Brexit deal by offering a mechanism for the Northern Irish assembly to leave a new so-called backstop after a number of years.

"Investor interest in gold remains high, as can be seen from the continuous ETF (exchange-traded fund)) inflows," Commerzbank analysts said in a note.

"Although the $1,500 mark has exerted a considerable pull on gold in recent weeks, and although gold has found it difficult to detach itself from this threshold, we believe that the gold price is well-supported."

Elsewhere, silver rose 0.5% to $17.79 an ounce, while platinum fell 0.2% to $888.38. Palladium rose 0.3% to $1,680.81 an ounce.


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