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Gold prices slipped on Monday as risk-aversion waned amid some signs of progress in US-China trade talks and as the dollar firmed.
Spot gold fell about 0.4 per cent to $1,313.38 per ounce by 0720 GMT, having hit $1,326.30 on Thursday - its highest level since April 26.
US gold futures fell 0.4 per cent to $1,316.8 per ounce.
“The plunge (from Thursday's peak) came along with fading enthusiasm for safe havens, as the US and China are moving to close a deal and many uncertainties surrounding the US government shut-down, Brexit, Fed policy were cleared last week,” said Margaret Yang, a market analyst with CMC Markets.
The US-China trade talks had a “good vibe” with much work remaining, White House economic adviser Larry Kudlow said on Friday, fanning hopes of an end to the long-drawn trade tiff between the world's two largest economies.
Meanwhile, the dollar was near a one-week high against the yen on the back of robust US jobs data.
“Upbeat non-farm payroll suggests the US economy is riding a strong momentum, dampening demand for safe-haven assets like gold,” Yang said, adding that this failed to change the market's view of the Federal Reserve's dovish stance with regard to its monetary tightening policy.
Despite signs of a robust economy, the Fed is widely expected to keep rates steady this year, thanks to heightened worries over global growth, especially in China and Europe.
“Investors are now focused on trade talks and what emerges out of those,” said ANZ analyst Daniel Hynes. “Any follow-up data that does indicate continued positive economic growth will potentially indicate to people how the Fed will move in the shorter term.”
Gold trade was subdued with top consumer China closed all week for the Lunar New Year.
Spot gold may test a support at $1,311 per ounce, a break below which could cause a loss to the next support at $1,299, according to Reuters analyst Wang Tao.
“I think gold will revisit the band of short-term support at $1,306-$1,310, but remains fairly well supported,” said Nicholas Frappell, global general manager, ABC Bullion.
Among other precious metals, palladium was flat at $1,350.59 per ounce. Silver was down about 0.5 per cent to $15.84 per ounce and platinum dipped 0.1 per cent to $820.74 per ounce.
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