December 23, 2019 / 4:36 AM / a month ago

PRECIOUS-Gold gains in pre-holiday trade on doubts over China-U.S. deal

 (Updates prices, adds comment)
    * Gold specs raise bullish positions in week to Dec. 17
    * SPDR Gold holdings rose 0.3% on Friday
    * Silver hits highest since Nov. 7

    By Sumita Layek
    Dec 23 (Reuters) - Gold prices rose to more than a one-week
peak on Monday in low-volume trading ahead of the Christmas and
New Year holidays, as the dollar eased slightly and
uncertainties over the Sino-U.S. interim trade deal lingered. 
    Spot gold        rose 0.3% to $1,482.61 per ounce by 0800
GMT. Prices had earlier risen to their highest since Dec. 12.
    U.S. gold futures         rose 0.4% to $1,486.10 per ounce.
    "There are some cosmetic improvements (in trade), but there
is no comprehensive deal. Secondly, everyone knows that the
Federal Reserve is not going to raise interest rates any time
soon, that makes gold really affordable," said John Sharma, an
economist at National Australia Bank.
    Gold, considered a safe investment in times of political and
economic uncertainty, is set to register its best year since
2010. 
    Bullion was supported by key central banks cutting interest
rates on the backdrop of the 17-month long tariff war and its
impact on economy.
    The dollar eased 0.1% against a basket of rivals, making
gold cheaper for holders of other currencies.       
    "A subdued dollar, thin volumes because of Christmas
holidays and uncertainty related to phase 1 trade deal, are
supporting gold prices," said Jigar Trivedi, a commodities
analyst at Mumbai-based Anand Rathi Shares & Stock Brokers.
    U.S. President Donald Trump said on Saturday Washington and
Beijing would "very shortly" sign their so-called phase one
trade pact, but markets are waiting for more details about the
deal they announced earlier this month.             
    "Trump and trade representatives from U.S. and China have
very frequently sent the same messages to the market, because of
that people have ignored the weekend news. The major focus is
when and where and which terms will be included in the trade
agreement," Trivedi added.
    Traders were also concerned after China's top lawmaking body
on Saturday criticized the defense bill that Washington passed
last week as "interference."             
    Indicative of sentiment towards bullion, holdings of the
world's largest gold-backed exchange-traded fund, SPDR Gold
Trust      , rose 0.3% to 885.93 tonnes on Friday.          
    Speculators also increased their bullish positions on COMEX
gold and silver contracts in the week to Dec. 17, data showed on
Friday.        
    Elsewhere, palladium        rose 0.7% to $1,868.77 per
ounce. The metal declined as much as 5% on Friday as investors
booked profits after it hit record highs.
    Silver        rose 1% to $17.36 per ounce, having earlier
risen to its highest since Nov. 7, while platinum        gained
1.1% to $918.59.

 (Reporting by Sumita Layek in Bengaluru; Editing by Aditya Soni
and Louise Heavens)
  
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