Investing.com - Prices of the safe-haven gold fell on Monday in Asia amid speculation that the U.S. and China will soon sign a partial trade deal.
Gold Futures for December delivery were down 0.2% to $1,466.25 by 12:30 AM ET (04:30 GMT).
Improved investor sentiment were cited as a headwind for the yellow metal today. Xinhua, Chinese state media, reported that high level officials from China and the U.S. discussed about a phase-one trade deal in a phone call Saturday morning.
The two nations had “constructive discussions” about “each other’s core concerns,” the article said. The USTR confirmed the call took place.
“The signing of the trade deal will likely provide another trigger to sell gold, investors should also consider how the U.S.-China relationship will move beyond the phase-one deal, which may be affected by developments surrounding Hong Kong and Huawei, and could impact gold prices,” said Jateen Trivedi, senior research analyst at LKP Securities Ltd.
Gold fell off the bullish $1,500 perch early this month after Federal Reserve Chair Jerome Powell suggested that the U.S. central bank’s third straight rate cut of a quarter point in October would be its last for the year.
Sentiment also improved today as Beijing surprised markets by trimming the seven-day reverse repurchase agreements for the first time since 2015.
The People’s Bank of China cut the rates to 2.5% from 2.55% on Monday. The authorities also added 180 billion yuan ($26 billion) of cash into the financial system via open market operations, helping to alleviate liquidity concerns.