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Gold Dips as Safe-Haven Crowd Reviews China Deal

By Barani Krishnan

Investing.com - As the hype of the U.S.-China deal builds, those who bet against it have to rethink their strategy. Gold prices fell on Thursday as the conclusion of the phase one agreement prompted safe-haven buyers to reconsider their two-year bet against the deal.

Palladium, meanwhile, ticked to another record high.

Gold futures for February delivery on New York’s COMEX settled down $3.10, or 0.2%, at $1,549 per ounce.

Spot gold, which tracks live trades in bullion, was down $4.27, or 0.3%, at $1,551.67.

Prices of the yellow metal slid as traders and investors took stock of the phase one deal that committed China to buying $200 billion of U.S. goods over the next two years, on top of assuring protection of intellectual property and patents between the two countries. Under the deal, Beijing also agreed not to devalue its currency on a whim.

“There are some conflicting fundamental stories keeping gold without a direction at the moment,” said Eric Scoles, analyst at RJO Futures in Chicago.

“While the phase one deal is signed and should be a bearish development for gold, the U.S. has indicated tariffs on China won’t be lifted possibly until after the presidential election in November. So there’s still a chance for gold to catch a bid,” Scoles said.

Speculators pushed palladium prices to another high of continuous worries of a supply squeeze in South Africa and Russia, which are top producers of the auto-catalyst metal.

Spot palladium was up $29.54, or 1.3%, at $2,292.75 per ounce. It earlier hit an all-time high of 2,396.62.

Palladium futures were up up $22.55, or 1%, at $2,187.65, after touching a record high of $2,244.60.

Palladium led gains across commodities in 2019, with a 55% gain. It is up more than 14% year to date.

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