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Gold Futures End Just Above $1500; Trade Deal Optimism Swirls

By Barani Krishnan

Investing.com - Optimism that the United States and China will reach some sort of a preliminary trade deal left gold futures at just above the key $1,500 support on Thursday as equities and risk assets soared amid the plunge in safe havens.

But analysts said bullion could spring back on the first signs of more difficulty in the deal.

“Gold is still trading within its current consolidation range and I believe it’ll stay there until there’s an update regarding President Trump and Vice Premier Liu He’s meeting, positive or negative,” said Eric Scoles, commodities strategist at RJO Futures in Chicago.

“When gold does break out, I’d consider a close above $1,519.0 a strong bullish signal, or a close below $1,492.0 strongly bearish.”

U.S. gold futures for December delivery settled down $11.90, or 0.8%, at $1,500.90 per ounce. It traded as low as $1,496.45 during the session before recovering.

But spot gold stayed under $1,500 after breaking through that support earlier. The spot price, reflective of trades of bullion, was down $8.85, or 0.6%, at $1,496.83.42 by 2:17 PM ET (18:17 GMT).

The United States and China could announce a limited trade deal this week averting a further escalation in trade tensions, the New York Times reported, citing a U.S. Chamber of Commerce official who has been briefed by both negotiating teams.

Myron Brilliant, the executive vice president and head of international affairs at the Chamber of Commerce, told reporters on Thursday that he was “hopeful” that a limited arrangement stopping a planned tariff increase on Oct. 15 would emerge from this week’s meetings .A limited deal would include the concessions that China has made to the United States, including an agreement on currency, the report said.

The White House could also contemplate removing the threat of additional tariffs that are slated to be imposed in December or scale back some of the tariffs it has already levied on more than $360 billion of Chinese goods, Brilliant said.

The agreement, however, is unlikely to address the key sticking points such as China’s economic practices and subsidies to its firms.

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