November 22, 2019 / 3:54 AM / 21 days ago

PRECIOUS-Gold gains as U.S.-China trade uncertainty lingers

    * Platinum set for a weekly gain of 2%

 (Updates prices, adds comment and details)
    By Sumita Layek
    Nov 22 (Reuters) - Gold firmed on Friday as doubts persisted
over the prospects of an interim trade deal being struck between
United States and China this year, while supply-squeezed
palladium was en route to its best week in 10.
    Spot gold        was up 0.2% at $1,467.26 an ounce by 0747
GMT. U.S. gold futures         rose 0.3% to $1,467.40.
    China wants to work out an initial trade pact with the
United States, but is not afraid to retaliate if necessary,
President Xi Jinping said. Beijing has invited top U.S. trade
negotiators for a new round of face-to-face talks.             
                         
    "The market doesn't have faith in a trade deal, and it
doesn't think the second round of talks will be very successful,
as the decisions from the first (round of talks) are yet to be
implemented," said Vandana Bharti, assistant vice-president of
commodity research at SMC Comtrade.
    The tariff war between the world's top two economies has
propelled gold, traditionally a safe asset in times of political
and economic uncertainty, about 14% higher this year, on track
for its biggest yearly gain since 2010.
    Investors were also wary that bills passed by Washington to
support anti-government protesters in Hong Kong, which has been
paralysed by demonstrations for more than five months, could
thwart progress towards an interim trade deal.             
    "On one hand, they are talking about positive trade talks,
on the other hand they are talking on the sensitive issue of
Hong Kong. So, ultimately it is giving an upper hand to gold
prices," Bharti said.
    The trade dispute was a key factor, against the backdrop of
a hold on monetary policy easing by the U.S. central bank,
another analyst said.
   "The trade deal is definitely the theme at the moment as it
looks like the U.S. Federal Reserve's easing is on hold, so
anything positive about the trade dispute is clearly negative
for gold and any delay is positive," said Nicholas Frappell,
global general manager at ABC Bullion.
    The Fed has cut interest rates three times this year to help
shield the economy from the effects of the trade war before
deciding to pause.             
    Lower interest rates reduce the opportunity cost for holders
of bullion, an asset that brings no interest.
    Elsewhere, platinum        dipped 0.7% to $908.85 per ounce,
but was on track to add about 2% for the week.
    Silver        rose 0.3% to $17.14. 
    Palladium        traded unchanged at $1,761 per ounce, but
eyed its best week in 10, gaining more than 3%. The metal, used
in vehicle exhaust systems to reduce harmful emissions, jumped
to a record high of $1,824.50 last month on a sharp supply
crunch.             

 (Reporting by Sumita Layek in Bengaluru; Editing by Shailesh
Kuber and Uttaresh.V)
  
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