On Monday, gold prices eased in the international markets as well as India as optimism around trade talks between the US and China renewed risk appetite among investors. A stronger rupee also lowered the burden for Indian buyers of the yellow metal.
At 10:48 am on Monday, gold futures (December 2019) on MCX were trading Rs 27 or 0.07 percent lower at Rs 37,818 per 10 grams. In the global market, spot gold was down by 0.2 percent to $1,1485.86 an ounce and shed 1 percent in value in the previous week.
On Friday, US President Donald Trump said that the two largest economies in the world had come up with a substantial "phase one" deal on intellectual property, financial services and big agricultural purchases.
Trade talks were held between the two countries on Thursday and Friday. Chinese Vice Premier Liu said substantial progress was made in the talks and they would continue to make efforts.
Trump suspended tariff hike on Chinese goods worth $250 billion that was set to kick in on 15 October while China agreed to step up farm purchases.
Investors usually park their funds in gold to hedge themselves against political and financial uncertainties. Positive progress in talks between the two countries in their over one-year trade conflict is a good sign for the global economy.
Meanwhile, results of Britain and European Union's talks ahead of their Thursday and Friday summit is awaited. Threats of a "hard Brexit" have subsided, lifting the spirits of the European markets.
Results of phase 2 and further talks between the US and China are also awaited. The current trend shows that the metal's price movement is higher affected by the trade talks.