Gold price gains as dollar stalls on US-China trade talks

New York (Feb 12) - Gold rose on Tuesday's slight pause in the dollar's rally as the United States and China continue talks aimed at ending their trade conflict.

Spot gold was up 0.3 percent at $1,312.45 an ounce at 1052 GMT after falling 0.4 percent in the previous session.

U.S. gold futures gained 0.4 percent to $1,316.70.

"The sentiment this morning is a little more constructive towards the deal," said ING analyst Warren Patterson.

"The (gold) price direction really hinges on how these trade talks play out. A positive outcome at trade talks could weigh on the dollar and that is constructive for gold prices."

The dollar steadied after climbing to its highest level since mid-December, having been the preferred refuge for investors concerned about the trade row.

U.S. Trade Representative Robert Lighthizer arrived in Beijing on Tuesday ahead of high-level trade talks to hammer out a deal ahead of a March 1 deadline. Also on investors' radar is a long-drawn logjam in Washington over funding for a border wall with Mexico, as well as the continuing uncertainties surrounding Britain's planned departure from the European Union. U.S. congressional negotiators on Monday reached a tentative deal to try to avert another partial government shutdown on Saturday. Investors are worried about the economic impact of a U.S. government shutdown when global growth is already lean.

"Trade and geopolitical risks remain to underpin (gold) price action and we expect this to continue over the near-medium term, with supportive price interest remaining broadly toward $1,300 - $1,310," MKS PAMP Group said in a note.

For the near term, gold is expected to stay above $1,300, which is seen as a critical support level in charts followed by technical traders, analysts said.

"If we now see short-term resistance break around $1,315, then this could lead to further technical follow-up buying pressure towards – and possibly beyond – January's high of $1,326," said Forex.com analyst Fawad Razaqzada.

Among other metals, palladium was up 0.2 percent at $1,388.84 an ounce while silver gained 0.6 percent to $15.80.

Platinum firmed 0.4 percent to $784.50 an ounce, having touched its lowest since Jan. 2 at $779.50 in the previous session.

Reuters