Friday 13 December 2019

Gold steady as weaker dollar offsets increased risk appetite

Gold prices were steady on Friday as a weaker dollar helped offset pressures from an increased appetite for riskier assets following reports of a breakthrough in Sino-U.S. trade negotiations, while palladium scaled a fresh peak.

Spot gold fell 0.1% to $1,467.20 per ounce by 0452 GMT, but was up about 0.5% so far this week.

U.S. gold futures were down 0.1% at $1,471.60.

Sources said on Thursday U.S. negotiators were offering to cut existing tariffs on Chinese goods by as much as 50% and suspend the new tariffs scheduled to go into effect on Sunday in an attempt to secure a "Phase 1" deal first promised in October.

"The market remains cautious ... Until we see little bit more data around what has been agreed to, investors aren't going to take any aggressive positioning in the gold market," ANZ analyst Daniel Hynes said.

"Gold has been driven by other issues, including central bank easing and low inflation, and that is helping support underlying investors appetite despite headwinds in the shorter term," he said.

U.S. stocks surged to record highs, while Asian equities rose to an eight-month peak, making safe-haven risk-off assets such as gold less appealing.

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