S& 500 rise on U.S.-Japan trade deal optimism; Tesla, Alphabet earnings due
* U.S. ISM non-manufacturing report due later in the day
* Dollar close to its highest in almost a week
(Adds comments; updates prices)
By Diptendu Lahiri
Nov 5 (Reuters) - Gold fell for a second session on Tuesday,
as Sino-U.S. trade deal hopes buoyed the dollar and improved
risk appetite, blunting investors' interest in the non-yielding
bullion.
Spot gold XAU= was down 0.1% at $1,507.17 per ounce as of
0728 GMT, while U.S. gold futures GCv1 declined 0.2% to
$1,508.20 per ounce.
Beijing and Washington have shown signs of progress in trade
talks with the Financial Times saying on Monday that the United
States is considering whether to drop some tariffs on Chinese
goods.
"The recent hopes of a trade truce between the United States
and China have led to the strengthening of the dollar overnight,
dragging prices today," Michael McCarthy, chief market
strategist at CMC Markets said by telephone.
The U.S. dollar was close to its highest in almost a week
against a basket of rivals on Tuesday, while Asian shares closed
in on their July peak, on growing optimism for the United States
and China to strike a preliminary deal to scale back their
long-drawn trade war. MKTS/GLOB USD/
A stronger dollar makes gold expensive for holders of other
currencies.
"Some positive trade headlines over the weekend and buoyant
risk sentiment with equities at all-time highs will be a test of
gold's resilience and market conviction in gold's uptrend," UBS
strategist Joni Teves said in a note.
Shaving some fears of an upcoming recession, recent data
suggests the outlook for the world's largest economy is not as
bad as some had feared, although the U.S. Federal Reserve has
cut interest rates three times this year.
After data last week showed U.S. job growth had slowed less
than expected in October, investors now await a U.S. ISM
non-manufacturing report due on Tuesday that is forecast to show
activity accelerated slightly in October. However, data on Monday showed new orders for U.S.-made
goods fell more than expected in September and business spending
on equipment was slightly weaker than initially thought,
suggesting that manufacturing remains soft amid the trade war
between the world's two biggest economies. "Gold looks bullish in the long run as economic
uncertainties still exists," said Kunal Shah, head of research
at Nirmal Bang Commodities in Mumbai, India, adding that over
the next year gold might hit $1,600 mark as some central banks
are poised to buy the metal. Among other metals, silver XAG= was flat at $18.06 per
ounce and platinum XPT= edged up 0.1% to $936.83 per ounce,
having fallen more than 1% in the previous session.
Palladium XPD= was down 0.4% at $1,772.04 an ounce, after
sliding 1.5% in the previous session.