PRECIOUS-Gold eases as stock markets cheer trade optimism

(Adds details, updates prices)
* Asian shares advance with MSCI's index ex-Japan up 1.1%
* China Sept exports fell 3.2% from year ago

By Karthika Suresh Namboothiri
Oct 14 (Reuters) - Gold prices eased on Monday, extending
falls for a third session as optimism surrounding U.S.-China
trade talks increased risk appetite, while a slight uptick in
the dollar also weighed on prices.
Spot gold XAU= dropped 0.1% to $1,487.81 per ounce as of
0729 GMT, having shed 1% in the previous week. U.S. gold futures
GCcv1 inched up 0.2% to $1,492.20 per ounce.
"Gold is not moving on gold fundamentals, it is moving on
whatever is going on with the trade situation," OANDA analyst
Jeffrey Halley said.
"The trade deal was short on detail, but is still going to
be enough to probably support risk, and that will be negative
for gold."
U.S. President Donald Trump on Friday outlined the first
phase of a deal to end the protracted Sino-U.S. trade war and
suspended a threatened tariff hike, the biggest step by the two
countries in 15 months. Asian stock markets cheered the news, with MSCI's broadest
index of Asia-Pacific shares outside Japan .MIAPJ0000PUS up
1.1% in light trade. MKTS/GLOB
The dollar index .DXY climbed higher from a three-week low
hit in the previous session, and traded near multi-month highs
versus the yen JPY= , also considered a safe-haven asset.
USD/
"The positive headline is encouraging. However, we saw the
same move before in April .... This time may be different as
timing could be the catalyst for both sides to go ahead with the
talk without derailing the situation," OCBC Bank said in a note
referring to the U.S.-China trade talks.
Tepid data from China brewed concerns that the world's
second largest economy was hurt by the ongoing trade spat, as
exports in September fell 3.2% from a year earlier. Meanwhile, markets await Britain and the European Union's
talks later in the day, ahead of a summit on Thursday and
Friday. Both parties said that a lot more work would be needed
to secure an agreement on Britain's departure from the bloc,
scheduled for Oct. 31. Gold is generally used by investors as a hedge against
political and financial uncertainty.
"We remain optimistic on bullion prospects as central banks
enact for monetary-policy easing programmes over looming
downside risks in the global economy," Phillip Futures analyst
Benjamin Lu said in a note.
Spot gold may fall to $1,446 per ounce, as it has cleared a
support at $1,488, Reuters technical analyst Wang Tao said.
Among other precious metals, silver XAG= inched 0.3%
higher to $17.59 per ounce and platinum XPT= dropped 0.3% to
$886.69.
Palladium XPD= rose 0.2% to $1,702.63 an ounce, hovering
close to its record high of $1,705.84 on Friday.