Gold shrugged off earlier gains to fall on Wednesday, as a report suggesting progress on the U.S.-China trade negotiations rekindled risk appetite, while palladium notched up a fresh peak.
The latest development on the trade front prompted gold to erase gains, said Michael Matousek, head trader at U.S. Global Investors. Washington and Beijing are moving closer to agreeing on the amount of tariffs to be rolled back in a phase-one trade deal, a Bloomberg report said. "That hit the tape when the U.S. was asleep, causing U.S. (gold) futures to drop, because U.S. equity futures started to rally."
The report comes a day after U.S. President Donald Trump said a trade agreement may be delayed until after November 2020 U.S. elections which had prompted a rapid sell-off in global equities, and pushed gold up more than 1%.
"It's been an interesting see-saw ... The market is looking for reliable information concerning tariff talks, more than anything else," said George Gero, managing director at RBC Wealth Management. "Gold traders have been buying dips and doing well selling at the bigger rallies. This has kept gold range-bound for some time between $1,480 and $1,500."
Safe-haven bullion has benefited from the trade uncertainties, propelling it 15% higher so far this year. Gold also found little support from weaker economic readings from the United States, with data showing private employers added the fewest jobs in six months in November, and in turn, a weaker dollar.
Elsewhere, platinum fell nearly 1% to $901.38 an ounce, while palladium rose 0.6% to $1,866.63.
Palladium, used mainly in catalytic converters in vehicles, jumped to a record high of $1,869.57 in the day, extending gains for a ninth straight session. The metal has jumped about 48% in 2019 on a sustained supply squeeze, despite a weakening global auto sector. However, some analysts said the metal was bound for a correction.
"We continue to think that palladium price increases are not justified by the fundamentals, and that prices will fall back," ABN Amro analyst Georgette Boele said in a note, adding she expects prices to dip to $1,450 by end-2020.
Elsewhere, silver shed 1.9% to $16.83 an ounce.