On Tuesday morning on MCX, gold futures (Dec 2019) fell as much as 0.08 percent to Rs 37,881/10 grams while silver futures (Dec 2019) were down by 0.43 percent to Rs 45,834 per kg. The metals were trading with minor losses on renewed trade deal optimism.
On Monday, MCX was closed on account of Diwali Balipratipada.
Talking to reporters on Monday, American President Donald Trump said, "We're looking probably to be ahead of schedule to sign very big portion of the China deal, and we will call it phase one."
Further, the United States Trade Representative, the lead US trade agency, said there could be an extension on tariff suspensions on $34 billion worth of Chinese goods set to expire on 28 December 2019.
In the international market, gold prices were stagnant at the key rate of $1,490 an ounce as progress in US-China trade took equity markets soaring. In the US, S&P 500 hit a record high on Monday (US time), while the Nasdaq fell just short of its lifetime high seen in late July on these statements.
However, the change in the yellow metal's prices wasn't drastic as analysts remain sceptical on the trade talks that have disappointed investors many times in the past. Analysts also await the Federal Reserve's decision on interest rates this week.
For over a year, China and the US have been imposing tit-for-tat tariffs that are now impacting hundreds of billions of dollars in two-way trade.
There is also uncertainty still looming over Brexit. On Monday, the European Union agreed to extend the deadline for Brexit to 31 January 2020 from 31 October. This comes at a time when the British MPs (members of the parliament) are preparing to vote on a proposal by Prime Minister Boris Johnson for a snap election in December.
Three years after the people of the UK had voted in a referendum to quit the EU, the British lawmakers have remained divided over how, when and even whether to leave, triggering a spiralling political crisis in the UK.
According to a PTI report quoting Commtrendz Research co-founder and CEO Gnansekar Thiagarajan, gold prices on MCX could touch Rs 42,000/10 grams by the end of this year over geo-political uncertainties.
"Geo-political uncertainties emerging from the Middle East may continue to underpin gold prices going ahead to $1,650 an ounce in Comex markets and Rs 42,000 in MCX," he told PTI.