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Gold inches up on concerns over trade deal, disappointing China data – Economic Times

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Gold prices edged up on Monday, as mixed signals from US- China trade talks kept investors cautious, although disappointing China factory data provided support.

FUNDAMENTALS

Spot gold was up 0.3 per cent at $1,462.46 per ounce by 0110 GMT, after touching a three-month low in the previous session.

US gold futures were flat, at $1,463.30 per ounce.

Trade talks with China were moving along “very nicely,” US President Donald Trump said on Saturday, but the United States would only make a deal with Beijing if it was the right deal for America.

Although a Sino-US trade war could ease somewhat, wider conflicts between the world’s two largest economies will continue, Lou Jiwei, a former Chinese finance minister, said.

The trade war has roiled financial markets and spurred fears of a global economic slowdown, pushing the precious metal nearly 14 per cent higher this year.

The United States and China had agreed to roll back tariffs on each others’ goods as part of the first phase of a trade deal, but Trump later denied any such agreement.

The Chinese producer price index (PPI), seen as a key indicator of corporate profitability, fell 1.6 per cent in October from a year earlier, its steepest decline since July 2016, National Bureau of Statistics (NBS) data showed, outstripping analysts’ expectation of a 1.5 per cent contraction.

Asian shares edged higher on Monday, after optimism around trade talks with China, though uncertainty remained whether a deal would be signed this year.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 1.44 per cent to 901.19 tonnes on Friday from Thursday’s 914.38 tonnes.

Hedge funds and money managers cut bullish positions in COMEX gold and silver contracts in the week to Nov. 5, the US Commodity Futures Trading Commission (CFTC) said.

Physical gold buying picked up in India as a correction in prices revived demand in the world’s second biggest consumer, narrowing discounts to the lowest level in five months, while buying interest was tepid elsewhere in Asia.