Gold steady as US-China trade truce weighs on dollar

BENGALURU: Gold prices were steady early on Monday as the dollar weakened on US-China trade truce that revived investor demand for riskier assets.

FUNDAMENTALS

Spot gold inched up 0.1 per cent to $1,222.97 per ounce at 0109 GMT.


US gold futures were up 0.2 per cent at $1,228.1 per ounce.

The dollar index, which measures the greenback against a basket of six major currencies, was down about 0.2 per cent.

Asian shares rallied on Monday after US and Chinese leaders brokered a truce in their trade conflict, a relief for the global economic outlook and a tonic for emerging markets.

China and the United States agreed to halt additional tariffs in a deal that keeps their trade war from escalating as the two sides try again to bridge their differences with fresh talks aimed at reaching an agreement within 90 days.

If no deal is reached within 90 days, both parties agreed that the 10 per cent tariffs will be raised to 25 per cent, the White House said.

Several world leaders are keen to strike trade deals with Britain once the country is out of the European Union, Prime Minister Theresa May will say on Monday, pressing the case for her Brexit deal before a fateful Dec. 11 vote in parliament.

The Italian Parliament begins voting this week on the government's contested 2019 budget, with Prime Minister Giuseppe Conte optimistic that a deal can be agreed with the European Commission.

Speculators increased their net short position in gold by 8,464 contracts to 51,828 contracts, according to US Commodity Futures Trading Commission data.

Physical gold demand in the world's second biggest bullion consumer India got a fillip this week from a slide in local rates due to gains in the rupee, while buying was steady in other top Asian hubs.

The US Mint sold 8,000 ounces of American Eagle gold coins in November, down 67.3 per cent from the previous month, according to the latest data.