Gold hovers near two-week low as US-China trade optimism dents demand

Gold prices hovered on Tuesday near their lowest in more than two weeks, as optimism over a possible U.S.-China trade deal dented demand for the safe-haven metal, while investors looked forward to major central bank policy announcements this week.

FUNDAMENTALS

* Spot gold was flat at $3,981.67 per ounce, as of 0024 GMT, after dropping more than 3% in the previous session to its lowest level since October 10.

* U.S. gold futures for December delivery lost 0.6% to $3,996.50 per ounce.

* On Sunday, top Chinese and U.S. economic officials hashed out the framework of a trade deal for U.S. President Donald Trump and his Chinese counterpart Xi Jinping to decide on later this week. * Trump said he thought a deal would be reached with China and announced a flurry of deals on trade and critical minerals in Malaysia with four Southeast Asian nations during the first stop of a five-day Asia trip.
* The U.S. Federal Reserve is widely expected to cut interest rate at the end of its policy meeting on Wednesday. Investors await any forward-looking language from Fed Chair Jerome Powell.
* Meanwhile, the European Central Bank and the Bank of Japan are both broadly expected to hold rates steady later this week.
* Gold prices have gained about 51% this year, reaching an all-time peak of $4,381.21 on October 20, bolstered by geopolitical and economic uncertainties, rate-cut bets and sustained central bank buying.

* Gold’s winning streak is seen extending into next year, with analysts forecasting an annual average price above $4,000 per ounce for the first time as economic and geopolitical turmoil keep the metal’s safe-haven allure intact, a Reuters poll showed.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.77% to 1,038.92 tons on Monday from 1,046.93 tons on Friday.

* China’s net gold imports via Hong Kong in September dropped 17.6% from levels seen in August, Hong Kong Census and Statistics Department data showed on Monday.

* Elsewhere, spot silver fell 0.3% to $46.74 per ounce, platinum slipped 1.2% to $1,571.85 and palladium dipped 0.8% to $1,391.15.