Gold fell to a one-week low on Monday after the United States and China expressed willingness to sign an initial trade deal by the year-end, lifting demand for riskier assets and boosting the dollar. Spot gold eased 0.2% to $1,459.16 per ounce by 0728 GMT, having earlier fallen to its lowest since Nov. 18. US gold futures fell 0.3% to $1,459.
"Trade optimism is sending global equities higher and capital is fleeing away from safe havens into risk assets," said Margaret Yang Yan, a market analyst at CMC Markets. Upbeat headlines about trade talks between Washington and China helped Asian shares regain footing, while the dollar rose, making bullion expensive for holders of other currencies.
"US economic data has shown signs of stabilisation recently ... also consensus is that the global slowdown is going to bottom in the first quarter of next year and then start to rebound," Yan said. Gold, considered a safe asset in times of political and economic uncertainty, has gained over 13% this year, mainly due to the tariff dispute and global economic concerns.
"Prices can fall below $1,400 if a 'phase 1' trade deal is signed. However, we can get a clear direction only after the first phase is completed," said Hareesh V, head of commodity research at Geojit Financial Services. Investors were still cautious on trade talks with US and Beijing officials saying an ambitious "phase two" trade deal looked less likely.
Speculators increased their bullish positions in COMEX gold and silver contracts in the week to Nov. 19. Spot gold may test a support at $1,455 per ounce, a break below which could cause a fall to $1,440, according to Reuters technical analyst Wang Tao.