Gold steadies as investors await clarity on U.S.-China trade

• Spot gold was little changed at $1,477.65 an ounce at 1250 GMT.
• Platinum rose 0.5pc to $914.24 and silver was little changed at $17.15.
• While the platinum market is expected to be oversupplied in 2020.

Gold steadied on Wednesday, hovering near a one-month high as investors awaited clarity on U.S.-China trade talks, while palladium soared to a record high on scarce supply.

Spot gold was little changed at $1,477.65 an ounce at 1250 GMT, having touched its highest since Nov. 7 at $1,484, while U.S. gold futures were down 0.1pc at $1,483.30.

Washington and Beijing are moving closer to agreeing on the amount of tariffs to be rolled back in a so-called Phase 1 trade deal, Bloomberg reported on Wednesday, citing sources.

"Investors are cautious about what would happen if we don't have a deal on Dec. 15, given the headlines we've been seeing in the past couple of weeks," said ING analyst Warren Patterson.

A further 15pc U.S. tariff on about $156 billion of Chinese imports is due to take effect on Dec. 15.

"The to and fro direction in the progress of the trade war has whipsawed gold markets," Patterson said, adding that the effects of headlines on prices will grow more intense as Dec. 15 approaches.

European stocks recovered some of the previous session's losses on U.S. President Donald Trump's warning that a deal with China might have to wait until after the U.S. presidential election next November.

Trump had also slapped tariffs on U.S. steel and aluminium imports from Brazil and Argentina Safe-haven gold has risen about 15pc this year, mainly on the back of the 17-month trade dispute. But this month it has been trading in a $1,444-$1,478 range, which was broken on Tuesday.

The U.S. House of Representatives, meanwhile, approved a bill that would require Washington to toughen its response to China's crackdown on its Uighur Muslim minority, which investors fear could threaten trade ties Elsewhere, palladium was down 0.1pc at $1,854.31 an ounce after hitting a fifth record high within a month, peaking at $1,868.69.

"We continue to think that palladium price increases are not justified by the fundamentals and that prices will fall back," ABN-AMRO analysts said in a note.

ABN-AMRO forecasts prices to be at $1,450 an ounce by the end of next year and $1,500 by the end of 2021.

Platinum rose 0.5pc to $914.24 and silver was little changed at $17.15.

While the platinum market is expected to be oversupplied in 2020, it should latch on to gold and still trade up to about $1,000 an ounce next year, UBS analysts said in a note.