PRECIOUS-Gold hits 3-month low, faces biggest weekly drop in 3 years

(Updates prices)
* Platinum on track for biggest weekly slip since Nov. 2015
* Silver set for steepest weekly fall since October 2016
* Palladium falls over 3% to a two-week low
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

By K. Sathya Narayanan
Nov 8 (Reuters) - Gold extended losses to a three-month low
on Friday as positive developments in U.S.-China trade tarnished
the metal's safe-haven appeal, putting it on track for the
biggest weekly decline in three years.
Spot gold XAU= was down 0.3% at $1,463.20 per ounce as of
1:56 p.m. EST (1856 GMT), poised for a drop of about 3.4%, the
biggest weekly loss since November 2016. It fell to $1,455.80,
its lowest since Aug. 5, earlier in the session.
U.S. gold futures GCcv1 settled down 0.2% at $1,462.90.
"We are seeing a rally in risk markets, dollar surge and
equities reaching an all time high. There had been a portion of
long positions built up in the last few months and we are
starting to see those liquidating," said Ryan McKay, a commodity
strategist at TD Securities.
"(Also,) we have had a lot of optimism on the trade front, a
lot of news on potential rollback on tariffs and the China deal,
which had been the major headwind for growth throughout the last
year."
Tariffs could be lifted if a U.S.-China trade agreement is
reached, a White House spokeswoman said, giving no further
details. The dollar .DXY hit a three-week high against key rivals,
while global equity markets slid, a day after they surged to a
21-month high. USD/ MKTS/GLOB
Uncertainty about the trade talks, however, prevailed as
U.S. President Donald Trump on Friday told reporters that he had
not agreed to roll back tariffs on China. "We are trading on a lot of speculation right now and
there's no solid evidence or anything specific," said Craig
Erlam, OANDA senior market analyst.
The trade war was one of the key reasons for bullion, which
is considered a safer asset during economic and political
uncertainties, rising about 14% so far this year.
Gold also benefited from dovish monetary policies by global
central banks, but the Fed's recent decision to hold back on
further cuts until the economy takes a downturn weighed on
bullion, analysts said.
Silver XAG= dropped 1.2% to $16.90 per ounce, having
touched its lowest since Aug. 13, and was set to post its
steepest weekly drop since October 2016.
Platinum XPT= fell 2% to $890.47 per ounce and was poised
for a weekly drop of about 6%, its biggest since November 2015.
Palladium XPD= , also an industrial metal, slumped 3.3% to
$1,741.65, having touched a two-week low, and was headed for its
first weekly decline in five.
Trump's comments triggered some uncertainties to the trade
deal and concerns on global growth and weighed on palladium,
said George Gero, managing director at RBC Wealth Management.