Gold prices drop as the U.S. and China close in on trade deal

Gold prices drop as the U.S. and China close in on trade deal

Gold prices fell on Monday after speculation spread that Washington and Beijing would soon sign a partial trade deal.

Gold Futures for December delivery inched down 0.2% to $1,466.25by 12:30 AM ET (04:30 GMT).

The improved investor sentiment was claimed as headwind for the safe-haven asset.

Xinhua, Chinese state media had reported that China and the U.S. trade officials had discussed about a phase-one trade deal in a phone call Saturday morning.  

“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.