Gold inched lower on Friday as demand for riskier assets improved on optimism that the bitter US-China trade war will be resolved soon, while investors awaited US GDP data for more cues on the health of the economy.
Spot gold fell 0.1% to $1,477.28 per ounce as of 1036 GMT. US gold futures were down 0.2% to $1,481.10 per ounce.
“There has been a good set of economic data released recently. The equity market is still going strong and the sentiment is more risk-on. So, people are just prepared to go for some more risky assets and reduce their gold positions,” said SP Angel analyst Sergey Raevskiy.
World stocks touched record highs after the United States and China agreed an initial trade deal, while the US dollar was holding close to a one-week peak scaled in the previous session.
US Treasury Secretary Steven Mnuchin said on Thursday the two countries would sign their so-called phase one trade pact at the beginning of January, adding that it would not be subject to any renegotiation.
China’s finance ministry unveiled a new list of import tariff exemptions for a duration of one year starting Dec. 26 for six chemical and oil products from the United States.
“Any news about the deal is better than no news about it… people are still waiting for more to come. It is being considered as the first step for a bigger agreement and it is a step in the right direction,” Raevskiy added.
Data on Thursday showed the initial US jobless claims report was strong with applications for unemployment benefits slipping from a more than two-year high.
Investors now await US gross domestic product data due out later on Friday.
“Key factors to watch for gold next year will be the second phase of the US-China trade negotiations, the US election, global monetary policy, and the investor response to these developments,” Standard Chartered Bank analyst Suki Cooper said in a note.
Elsewhere, palladium gained 0.3% to $1,941.87 per ounce and was on track for a fifth straight week of gains.
The autocatalyst metal had hit an all-time peak of $1,998.43 earlier this week on a sustained supply crunch, which was aggravated after recent mine closures in major producer South Africa.
Silver slipped 0.1% to $17.04 per ounce, while platinum eased 0.2% to $931.44. Both the metals, however, were on track for a weekly gain.