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Gold Prices Fall On US China Trade Deal Optimism

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On Tuesday, gold futures on MCX declined by over 0.5 percent to Rs 39,262 per 10 grams on global cues.

Price of the safe-haven metal fell in the international market as investors chose to move to riskier assets ahead of the signing of phase one of US-China trade deal. Spot gold dipped 0.7 percent to $1,537.67 per ounce.

Gold Prices Fall On US China Trade Deal Optimism
 

The optimism on de-escalation in tensions between the two economies spiked after the US reversed its decision to brand China a currency manipulator on Monday. Equity markets around the world, including India, recorded new highs.

American and Chinese representatives are scheduled to sign a 'phase one' deal on Wednesday in Washington that will promise billions of dollars' worth of US agricultural purchases and the reforms in technology transfer.

In 2019, when US-China tit-for-tat tariff war was at its peak, gold rates surged by 18 percent.

Renewed hope of improvement in global economy amid the trade deal and ebbing tensions in the Middle East could dim the metal's lustre further.

Reuters analysts said spot gold could fall towards $1,524 an ounce, as it has cleared support at $1,546.

However, geopolitical tensions remain. After Iran admitted that it accidentally shot down the Ukrainian passenger aircraft, leaders from various countries have demanded a full and thorough investigation into the tragedy. The majority of those on Flight PS752 were Iranians and Canadians, including dual nationals. Others who lost their lives were Ukrainians, Afghans, Britons and Swedish.

Iran has invited experts from Canada, France, Ukraine and the US to take part in the probe.

Further, a statement released by North Korea over the weekend rejected a return to working-level talks with the US, despite Chairman Kim's good relations with President Trump.

Read more about: gold gold prices
Story first published: Tuesday, January 14, 2020, 13:08 [IST]
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