Gold fell on Wednesday as equities climbed to record levels bolstered by hopes that the United States and China were close to signing an initial trade deal and by the release of robust US economic data. Spot gold dipped 0.5% to $1,454.41 per ounce as of 02:03 p.m. ET (1903 GMT), slipping five sessions in six.
US gold futures settled 0.5% lower at $1,453 per ounce. "Given the situation, the statements from the White House that the US- China trade deal may be imminent is continuing to drive risk appetite a bit higher," said Bart Melek, head of commodity strategies at TD Securities.
"There is less interest in gold as a hedge, and a higher opportunity cost to hold zero yielding assets like gold." Wall Street hit fresh record levels on Wednesday while world shares were close to notching a record peak in the session after US President Donald Trump said the world's two largest economies were in the "final throes" of signing an initial trade deal.
Market confidence was buoyant and investors moved away from safe-haven gold. The CBOE VIX equity volatility index, often referred to as a fear gauge, was at seven-month lows. The absence of signs of further monetary policy easing in the near term by the US Federal Reserve did little to support gold. Fed Chair Jerome Powell said on Monday that monetary policy was "well positioned" to support the strong US labour market.
"Gold remains range-bound with hard support sitting toward $1,445-$1,450... While top-side resistance cuts in toward $1,475-$1.480," analysts at MKS PAMP said in a note. Palladium jumped 1.1% to $1,830.00 an ounce, after hitting a record high of $1,834.76 in the session. Silver dropped 0.6% to $16.96 per ounce, platinum slipped 1.5% to $893.94.
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