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Gold rises as trade hopes fade, amid focus on Brexit

Gold rises as trade hopes fade, amid focus on Brexit

Mubasher: Gold was higher on Tuesday as hopes surrounding trade talks between the US and China waned, while markets were anticipating the outcome of crunch meeting that would determine the fate of Brexit, according to Reuters.

By 11:00 am GMT, spot gold inched up by 0.06% to $1,492.12 per ounce, while US gold futures edged up by 0.11% to $1,499.20 per ounce.

“Markets enjoyed a good risk-on rally, but on Monday news came out saying that China required more negotiation and talks before they find any deal, which is very disappointing,” CMC Markets analyst Margaret Yang Yan was quoted by the news agency.

China wants to hold further talks as soon as the end of October to ink the terms of “phase one” deal before US President Donald Trump and his Chinese counterpart Xi Jinping agree to sign it, according to a Bloomberg report.

After drafting “phase one” of trade deal, officials from both sides said more work was needed before any accord could be hammered out.

Asian stock markets and Wall Street futures edged higher as some investors were still hopeful that the UK could possibly avert a disorderly departure from the European Union (EU).

Officials from London and Brussels are due to meet at a crunch summit on Thursday and Friday where it will be determined whether the UK was on track to a no-deal departure.

“The Brexit narrative seems to be playing as a basic risk on/off catalyst, with echoes into bond yields driving near-term gold swings,” DailyFx senior currency strategist Ilya Spivak was quoted by Reuters.