Mubasher: Gold prices saw marginally moved earlier on Thursday as caution gripped markets in the midst of signs of a potential delay to the signing of an initial trade deal between the US and China.
By 7:18 am GMT, spot gold inched up by 0.05% to $1,491.29 per ounce, while US gold futures ticked up by 0.01% to $1,493.20 per ounce.
A meeting between US President Donald Trump and his Chinese counterpart Xi Jinping to ink a preliminary trade deal could be postponed until December as talks continue over terms and venue, a top White House official told Reuters.
“Trade talks are going to go ahead and at the same time, the complicated issues in the deal have not yet been discussed, so the investors are in wait-and-see-mode,” National Australia Bank (NAB) economist John Sharma was quoted by the news agency.
Asian equities struggled to hold onto their multi-month highs, while bonds bounced on the reported delay in the long-awaited interim trade deal came disappointing for investors due to the lack of concrete progress.
“Sentiments are that some kind of deal will get done, also the Federal Reserve have said that they are not looking to do anything more this year, that is why gold is not reacting much,” Singapore-based dealer GoldSilver Central managing director Brian Lan was quoted by Reuters.
Last October, the Fed reduced interest rates for the third time this year, but signalled that there would be no more cuts this year, unless the world’s biggest economy takes a downward turn.
Lower interest rates tend to support the precious metal, as it lowers the opportunity cost of holding the non-yielding bullion.