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Gold subdued as equities jump on trade deal hopes
GOLD prices were little changed on Tuesday, hovering around US$1,490 an ounce as progress in China-US trade talks sent equities soaring, while anticipation ahead of major central bank meetings in the week provided some support.
Spot gold was little changed at US$1,493.09 per ounce as of 07:37 GMT, after shedding nearly 1 per cent in the previous session. US gold futures eased slightly to US$1,495.50 an ounce.
The possibility of the US and China signing a significant part of the trade deal with China ahead of schedule saw Wall Street jump to an all-time peak on Monday, while Asian shares scaled a three-month high in early trade on Tuesday.
"There is a broad risk-on sentiment, with US equities hitting a fresh record high. The trade talks are highly unpredictable... It has disappointed investors many times in the past and may repeat again," said Margaret Yang Yan, a market analyst at CMC Markets.
"The market is very positive about it right now, but that also means it is very vulnerable."
Gold was far from losing its sheen, analysts said, as a dearth of clarity on trade talks and Britain's negotiations on leaving the European Union (EU) still loomed large.
The EU agreed to a Brexit delay of up to three months, but Brexit hangs in the balance, with British politicians still arguing over how, when or even whether it should take place at all.
Investors also braced for another dose of policy stimulus from the US Federal Reserve this week, where it is expected to cut rates for a third time in a row when it concludes its two-day meeting on Wednesday.
Central banks in Japan and Canada are also scheduled for policy meetings this week. Lower interest rates make gold attractive as it reduces the opportunity cost of holding the metal. REUTERS