US MIDDAY: gold dips

Gold prices slipped on Wednesday as stock markets rallied globally on hopes the United States and China could clinch a trade deal, while a weaker dollar limited bullion's losses.
Spot gold was down 0.2 percent at $1,290.25 per ounce as of 1:35 p.m. EDT (1735 GMT). US gold futures settled flat at $1,295.30 per ounce.
"With investors willing to take on more risks and moving into some riskier assets, there is less attraction towards gold, and funds are moving back out of Treasuries into the equity markets," said Chris Gaffney, president of world markets at TIAA Bank.
Signs of progress in US-China trade talks and decent Chinese and US factory activity data in recent days have
lifted sentiment and taken the edge off world recession fears.
Hopes for a deal to end the trade war between the world's two largest economies were fanned by fresh comments from White House economic adviser Larry Kudlow that Washington expects "to make more headway" in talks this week.
Limiting further declines in gold, the dollar, which was sought as a safe-haven in preference to gold last year against a backdrop of the unfolding trade war, dropped after climbing to a 3-1/2-week peak the previous day.
"If the US Federal Reserve does remain on pause and we see any indication that the US markets are going to sell off, we could see gold breach $1,300," Gaffney said.
In addition to bringing its three-year drive to tighten monetary policy to an abrupt end last month, the Fed downgraded the US growth, unemployment and inflation forecasts.
Investors are now waiting for clues on the strength of the US economy from non-farm payrolls data due on Friday.
Indicative of investor sentiment toward bullion, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD, fell to their lowest since March 8 at 768.10 tonnes on Tuesday.
"I would look at $1,300 and the 100 day moving average at $1,291.4. Depending on global risk sentiment and outside markets, there could be some follow through," said Michael O'Donnell, senior market strategist at RJO Futures on bullion's near-term outlook.
Meanwhile, palladium shed more than 3 percent in the session to $1,382 per ounce. Prices had hit a one-week high of $1,444.37 earlier in the session.
Platinum was up 2.2 percent at $864.66 per ounce, while silver was little changed at $15.11. Platinum prices were at their highest since March 21.