Gold prices held steady on Thursday, supported by concerns that US legislation on Hong Kong could increase tensions between the United States and China and delay an interim trade deal. Spot gold was little changed at $1,470.75 per ounce by 0746 GMT. US gold futures were down 0.2% to $1,471.00.
"There is the possibility that the deal might not be completed this year, so that is a key support factor," said John Sharma, an economist with National Australia Bank. The metal dipped slightly after China said it would strive to reach a "phase one" trade deal with the United States, before recovering the lost ground.
"The price momentum is a bit see-saw, something positive on trade pushes gold down, something negative takes it higher," Sharma added. Global stocks faltered as Washington and Beijing sparred over US bills on Hong Kong, and trade experts and people close to the White House said completion of a "phase one" deal could slide into next year.
Minutes from the Federal Reserve's October policy meeting offered little guidance on what would cause policymakers to change their minds on the outlook after an increasingly divided Fed decided to pause its easing cycle. "The minutes showing that there is no need for a fourth interest rate cut is weighing slightly on gold," said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers.
Lower interest rates reduce the opportunity cost for holding the non-yielding bullion. However, gold will remain supported as "no one knows when the trade war will be exited", said Trivedi, adding the $1,460 level would act as a technical support while resistance was at $1,480.