Mubasher: Gold prices declined on Tuesday, after tapping a two-week low, as comments from both Washington and Beijing raised the prospects of both side hammering out a preliminary trade deal, Reuters said.

By 7:58, spot gold stabilised at 1,455.29 per ounce, after falling earlier in the session to $1,454.19 per ounce, the lowest level since 12 November, while US gold futures inched up by 0.12% to $1,462.10 per ounce.

China’s Vice Premier Liu He, US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin held discussion via the phone on issues pertaining “Phase One” trade agreement.

Hopes of a soon resolution to a prolonged trade conflict was Beijing’s pledge to improve protections for intellectual property rights.

“We’re seeing some momentum and signs of progress in the trade talks; also expecting some good [economic] data this week and all this is collectively providing optimism,” Phillip Futures analyst Benjamin Lu was quoted by Reuters.

This meant more appetite for riskier assets, weighing in turn demand for the safe-haven bullion.

Asian shares rallied, as the US dollar was close to its highest level in two weeks, on mounting hopes that the world’s largest two economies will clinch a deal soon.

The US dollar index, which gauges the greenback against six major peers, ticked down by 0.03% to 98.2960.

However, “there hasn't been much substantial detail other than [both sides] are working very closely, and besides the US, other parts of the world are still showing slow economic growth, so gold will still be supported,” Lu said.

Although US Federal Reserve Chair Jerome Powell had a favourable outlook for the world’s biggest economy, he said that soft global growth and trade uncertainty are keeping a lid on expansion.

Powell on Monday pledged that the Fed would “respond accordingly,” should economic reports result in a “material reassessment” of the outlook.

The US central bank delivered three rate cuts so far this year before deciding to hold steady on policy.