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PRECIOUS-Gold firms as stocks pause, trade uncertainty lingers

Published 2019-11-06, 08:05 a/m
© Reuters.  PRECIOUS-Gold firms as stocks pause, trade uncertainty lingers
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* Global stocks steady after three-day rally

* Silver hits near 3-week trough, platinum at 1-week low

* Graphic on 2019 asset returns: http://tmsnrt.rs/2jvdmXl (Updates prices, adds comments)

By Swati Verma

Nov 6 (Reuters) - Gold gained on Wednesday, recouping some losses after a nearly 2% decline in the previous session, as a rally in equities stalled and the outcome of U.S.-China trade talks looked uncertain again.

Spot gold XAU= rose 0.1% to $1,485.07 per ounce at 1243 GMT. U.S. gold futures GCcv1 were up 0.2% at $1,486.50.

"There is a bit of caution in the marketplace today. We still don't know if there is a (U.S.-China trade) deal yet. We need to wait-and-see whether there is going to be any confirmation regarding trade talks," said Afshin Nabavi, senior vice president at precious metals trader MKS SA.

There was also some short covering in the gold market after Tuesday's sharp decline, Nabavi said.

Gold, seen as a safe haven during times of economic uncertainty, dropped to a near three-week low of $1,479.25 an ounce in the previous session and registered its biggest one-day percentage drop since late September at 1.7%.

Hopes of a detente in the trade war boosted sentiment about the global economic outlook and pressured safe-haven assets like bullion and government bonds.

"Gold is somewhat desperately trying to cling onto key support around $1,480, finding mild support because of the stock market rally pausing for a breather," said Fawad Razaqzada, market analyst with Forex.com.

Global stock markets steadied after a three-day rally as traders continued to watch incoming economic data and awaited fresh developments from U.S.-China trade talks. MKTS/GLOB

Investors now await new developments on the talks after reports that China is pushing U.S. President Donald Trump to remove more tariffs imposed in September as part of a "phase one" trade deal. while further short-term weakness looks more likely than it did a couple of weeks ago, the longer-term outlook remains positive for gold," Razaqzada said.

"A potential trade deal might not be a bad thing for gold, after all. One has to remember that China is a big consumer of the precious metal. The prospects of a trade deal therefore boosts the physical demand outlook for gold both directly, and indirectly via a stronger yuan."

In other precious metals, silver XAG= fell 0.8% to $17.45 per ounce, having touched its lowest since Oct. 17 earlier.

Platinum XPT= was down 0.5% at $924.52 per ounce. The metal hit a one-week low of $917.

Palladium XPD= gained 0.8% to $1,791.86.

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