March 26, 2018 / 4:50 AM / 6 months ago

PRECIOUS-Gold dips as trade war fears ease on report of U.S.-China talks

    * Gold to be headline-driven for the moment - analysts
    * Gold specs cut net long position by 23,822 contracts -
CFTC

 (Recasts, adds quotes, and updates prices)
    By Eileen Soreng
    March 26 (Reuters) - Gold prices inched lower on Monday,
from a five-week high hit earlier in the session, on
profit-taking and as fears of a U.S.-China trade war eased
following reports of negotiations among two of the world's
leading economies.
    Spot gold        was down 0.1 percent at $1,346.01 per
ounce, as of 0836 GMT. Earlier in the session, gold prices
climbed as much as $1,350.76 per ounce, their highest since Feb.
19.
    U.S. gold futures         for April delivery slipped 0.3
percent to $1,346.3 per ounce.     
    "A mild early session bid tone to the bullion during Asian
trade on Monday, and was soon extinguished by resting offers
around $1,350, as participants looked to take profits ahead of
key resistance levels," MKS trader Sam Laughlin said in a note.
    Market watchers got a breather when Wall Street Journal
reported the United States and China have quietly started
negotiating to improve U.S. access to Chinese markets. 
            
    "Trump and China seem to be narrowing the list of tariffs
and it might not be as disastrous as originally thought," said a
Singapore-based trader. 
    The United States asked China in a letter last week to cut
the tariff on U.S. autos, buy more U.S.-made semiconductors and
allow their firms greater access to the Chinese financial
sector, the Wall Street Journal reported on Monday, citing
unnamed sources.
    News of the U.S.-China talks eased fears of a trade war
lifting global shares on the back of higher U.S. stock futures.
            
    Gold is sought as a store of value during times of political
and financial uncertainty.
    Meanwhile, investors continued to closely monitor other
developments such as U.S. President Donald Trump's appointment
of John Bolton as national security adviser and fresh tensions
between Saudi Arabia and Yemen's Houthi militia.             
    The appointment of Bolton, who has previously advocated
using military force against North Korea and Iran, last week
provoked strong reactions worldwide.                
    "Much of what gold will do this week will be
headline-driven, with trade news being front and center," INTL
FCStone analyst Edward Meir said in a note. 
    Meanwhile, speculators cut their net long positions in the
week to March 20 by 23,822 contracts to 121,838 contracts, U.S.
Commodity Futures Trading Commission (CFTC) data showed on
Friday.             
    In other precious metals, silver        climbed 0.2 percent
to $16.55 per ounce; while platinum        rose 0.3 percent to
$949.80 per ounce.
    Palladium        slipped 0.1 percent to $976 per ounce.

 (Reporting by Eileen Soreng in Bengaluru; Editing by Christian
Schmollinger and Sherry Jacob-Phillips)
  
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