Investing.com -- Gold prices dipped on Monday before recovering in response to a report saying that China was pessimistic about the near-term chances of a trade agreement with the U.S.
CNBC cited a source in China as saying that Beijing was minded not to make any further concessions in talks in the near term, preferring to wait and see how the impeachment proceedings against President Donald Trump play out.
If substantiated, that would reduce the odds of the phase one trade deal that both sides have publicly talked up, but repeatedly pushed back due to reported differences over issues ranging from tariffs to intellectual property rights.
By 9:55 AM ET (1455 GMT), gold futures for delivery on the Comex exchange were at $1,470.25 a troy ounce, up over 1% from an intraday low of $1,456.65 just before the news and up 0.1% from Friday’s close in the U.S. Spot gold was up 0.2% at $1,469.95.
U.S. Treasury bond yields also fell by two to three basis points all along the yield curve on the news.
Silver futures also rebounded to $16.94 an ounce, down less than on the day, while platinum futures were down 0.1% at $893.60.
Gold has struggled for direction in recent days as upbeat talk on trade – which is normally bearish for haven assets – has competed for the market's attention with the still-intact global trend to lower interest rates.
The uncertainties over further direction were underlined earlier Monday in Europe: European Central Bank Vice President Luis de Guindos and Chief Economist Philip Lane both talked up the possibilities for future stimulus, while Germany’s Bundesbank emphasized that the situation in the euro zone’s largest economy has probably stopped deteriorating. In its monthly report there’s “no reason to fear” that the euro zone’s largest economy will slide into a recession.
The mixed picture was also evident in the weekly Commitments of Traders Report from the Commodity Futures Trading Commission on Friday, said World Gold Council strategist John Reade.
Reade noted via Twitter that “Net Managed Money Longs fell in the week to last Tuesday, but the driver was long liquidation, not fresh shorts.” At the same time, however, open interest in the contract rose.
Net longs in gold still remain close to their recent highs despite last week’s decline. Net longs in silver, however, fell to their lowest since August last week on the burst of trade-related enthusiasm that propelled last week’s rally in risk assets.