Gold Prices Fall on the Scheduled Signing of U.S.-China deal on Wednesday

Gold News

The prices of gold were down Monday on news that the U.S. and China will be signing their interim trade agreement on Wednesday. The news led investors to flock to riskier assets and lifted the Asian equities market to a 19-month peak.

U.S. gold futures dropped by 0.4% to $1,553.30 an ounce while spot prices declined by 0.6% to $1,552.42 an ounce as of 0756 GMT. The precious metal gained by 0.7% last week because of slower-than-expected job growth in the U.S. in December and the Middle East tensions.

According to AxiTrader market strategist Stephen Innes, the scheduled signing of the Sino-U.S. Phase One trade deal has switched the market into a risk-on mode and is depressing the prices of the yellow metal. Investors’ renewed interest in the U.S. dollar also weighs on the bullion.

Yesterday, U.S. Treasury Secretary Steven Munchin announced that there were no changes in the terms of the deal after the translation process and they will release the details within the week. It was also reported that the two largest economies in the world have committed to conduct semi-annual meetings to resolve their disputes and push for trade reforms. The U.S.-China trade dispute has raised gold prices by 18% in 2019.

Meanwhile, the U.S. has imposed sanctions on Iran and vowed imposed more if Tehran continues to pursue its nuclear weapons development program and its “terrorist” activities.

On the technical front, Reuters’ technical analyst Wang Tao predicts spot prices to break its support price level at $1,546/oz and slide further to $1,524/oz.

In a related development, the market speculators have raised their stance in COMEX gold contracts for the week which ended on January 7. Also, the holdings of the largest gold-backed exchange-traded fund SPDR Gold Trust dropped by 0.9% to 874.52 tons, its lowest level since September 16, 2019.

Source:PRECIOUS-Gold slips as Asian equities rise ahead of Sino-U.S. trade deal