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Gold falls as risk appetite grows on US-Sino talk hopes

Gold falls as risk appetite grows on US-Sino talk hopes

Mubasher: Gold prices dipped on Monday on rising appetite for riskier assets amid hopes for progress in trade talks between the US and China, along with a firm dollar.

By 9:10 am GMT, US gold futures fell 0.44% to $1,316.30 per ounce, while spot gold dropped 0.50% to $1,311.40 per ounce.

“The plunge came along with fading enthusiasm for safe havens, as US and China are moving to close a deal and many uncertainties surrounding the US government shutdown, Brexit, [the Federal Reserve] policy were cleared last week,” CMC Markets market analyst Margaret Yang told Thomson Reuters.

The trade talks between Washington and Beijing had a “good vibe” with much work remaining, White House economic adviser Larry Kudlow said on Friday, raising hopes for an end to the trade row between the world’s two biggest economies.

The US dollar was close to a one-week peak against the Japanese yen (JPY) after strong US job data.

The US dollar index, which tracks the greenback against a basket of six major peers, went up 0.10% to 95.6780.

“Upbeat non-farm payroll suggests the US economy is riding a strong momentum, dampening demand for safe-haven assets like gold,” Yang said.

Despite signs of a resilient economic growth, the Fed is widely expected to maintain interest rates at their current level this year, owing to mounting worries over global growth, particularly in China and Europe.

As market focus turned to trade talks and their outcome, “any follow up data that does indicate continued positive economic growth will potentially indicate to people how the Fed will move in the shorter term,” Australia and New Zealand (ANZ) analyst Daniel Hynes told Reuters.