Gold prices were subdued on Tuesday as Washington granted an extension for US companies to continue doing business with Chinese company Huawei, a move that markets took as a sign of progressing US-China trade relations.
Spot gold eased 0.1% to $1,469.76 per ounce as of 10:13 a.m. ET (1513 GMT), slightly paring losses from earlier in the session. US gold futures dropped 0.1% to $1,470.30.
"Safe havens are a little weaker in the day on the back of new highs in equities," said David Meger, director of metals trading at High Ridge Futures.
"The fact that gold has been stable within an environment with equity markets driving to new highs is a testament that there is still interest in safe haven assets," he said, attributing this to concerns about economic growth and lingering doubts about a trade deal.
After adding Huawei Technologies
to an economic blacklist in May, the US Commerce Department has allowed it to purchase some American-made goods, and granted a new 90-day extension to minimize disruption for its customers. This prompted Wall Street to open at a record high, and stocks globally raced to a 22-month peak as investors maintained bets that the United States and China can reach a deal to end their damaging trade war.
In the previous session, a report that Beijing was not as optimistic about a deal, owing to US President Donald Trump's reluctance to roll back tariffs, had pushed gold into positive territory. However, assumptions that a "phase one" trade deal could be reached soon outweighed any creeping doubts, with gold shedding nearly 3% so far this month.
Meanwhile, the dollar stabilized after three straight days of declines, with investors awaiting the release of the minutes of the US central bank meeting at end-October when policymakers cut interest rates. On the technical front, support for gold was around $1,450 while resistance lay around $1,470-$1,474, said Carlo Alberto De Casa, chief analyst at ActivTrades.
The Fed cut rates three times this year - in part to offset what it views as damage done by the tariff war. But after their meeting in October, policymakers decided not to opt for rate cuts unless the economy took a turn for the worse.
US homebuilding rebounded in October and permits for future home construction jumped to a more than 12-year high, pointing to strength in the housing market amid lower mortgage rates. Other precious metal prices rose, with silver up 0.2% at $17.06 per ounce, platinum gaining 1.1% to $904.03 and palladium up 1.1% to $1,756.02 an ounce.
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