Spot gold rose 0.1% to $1,485.25 per ounce at 0742 GMT. On Tuesday, prices registered their biggest one-day percentage drop since late-September at 1.7%.
U.S. gold futures were up 0.2% at $1,486.90.
· “We are not very bearish on gold prices as there are concerns over global economic growth. Economic data from the U.S., China and the European Union is not very strong ... this short-term pullback is just a technical retracement,” said Ajay Kedia, director at Kedia Advisory in Mumbai.
The protracted trade war between the United States and China has roiled financial markets and raised fears of a global economic slowdown, helping the safe-haven bullion to rise more than 15% this year.
· Optimism that Washington and Beijing are working to narrow their differences enough to sign a “phase one” trade deal as early as this month has boosted risk sentiment in financial markets and weighed on gold in the past two sessions.
However, the venue for signing the deal was not yet finalised.
· “(Trade talks) are unpredictable, as long as the deal is not complete and in paper it is closed, uncertainty is going to be there, because by now we have seen them starting talks and stopping mid way several times,” Kedia said.
· Asian shares fell for the first time in four trading sessions as some investors started to temper their optimism in the absence of concrete progress in negotiations between the world’s two-largest economies on scaling back their bruising trade war.
· The dollar index eased against major currencies, making bullion cheaper for non-U.S. investors.
· U.S. data on Tuesday showed better-than-expected ISM non-manufacturing data for October and eased some fears of global economic slowdown.
· “Should gold finally break the $1,480.00 region convincingly, we may see some long position liquidation,” said OANDA analyst Jeffrey Halley in a note.
· Holdings in the world’s largest gold-backed exchange-traded fund SPDR Gold Trust, rose 0.13% to 915.85 tonnes on Tuesday.
· Gold: Sidelined after biggest single-day drop since Sept. 25
Gold is trading in a sideways manner around $1,486 at press time, having dropped by 1.74% on Tuesday to register its biggest single-day drop since Sept. 25.
The metal faced selling pressure on Tuesday even though doubts emerged regarding a potential phase-one of the US-China trade deal.
The US data calendar is light today with Unit Labor Costs (Q3) scheduled at 13:30. A big beat in expectations will likely push the US dollar higher, leading to a drop in gold. Comments from Fed's Evans may also influence the metal.
· Among other metals, silver fell 0.2 % to $17.54 per ounce, while platinum was down 0.5 % at $924.52 per ounce. Palladium inched 0.4% lower to $1,771.54 per ounce.
Reference: Reuters,FXStreet
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