Futures Movers: Gold falls to test $1,500 as stocks, bond yields and dollar rise on hopes for trade deal

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Gold futures fell Tuesday morning amid a trio of headwinds that were threatening to push the precious metal beneath a key psychological level at $1,500 for the first time in nearly a week.

Stocks, bond yields and the U.S. dollar were all higher on fresh hopes for a U.S. – China trade deal, undermining demand for safe haven assets such as gold.

December gold GCZ19, -0.87%  on Comex fell $10, or 0.7%, to $1,501.10 an ounce, after notching slipping less than 0.1% on Monday. The most-active contract for the precious metal hasn’t settled below $1,500, a level seen by technical analysts as a dividing line between bearish and bullish sentiment, since Oct. 30, according to FactSet data.

December silver SIZ19, -1.00%, meanwhile, shed 11 cents, or 0.6%, at $17.955 an ounce.

The Wall Street Journal and Financial Times (paywall), citing people familiar, reported that U.S. and Chinese officials were actively considering rolling back some tariffs to complete the partial trade agreement.

The U.S. has already put off tariff hikes from 25% to 30% on $250 billion of Chinese imports that were to have taken effect in October, and has suggested it may put off tariffs on another $160 billion in Chinese goods set to take effect Dec. 15 if an initial trade deal is signed

Yields for the 10-year Treasury were up around 1.819%, representing the highest level for the benchmark debt since Oct. 29, with gains in yields momentarily undercutting demand for government paper. Bond prices fall as yields rise.

“Gold was also on the way down, falling to around $1505.50, as the precious metal was pressured by rising US Treasury yields,” wrote Raffi Boyadjian, senior investment analyst at brokerage XM, in a Tuesday research note.

Meanwhile, the U.S. dollar was perking up, rising 0.1% at 97.642, as measured by the ICE U.S. Dollar DXY, +0.18%, a measure of the U.S. currency against a basket of a half-dozen rivals.

A stronger dollar can make assets priced in the monetary unit comparatively more expensive.

“A general risk on mood is still dominating markets. This factor, along with the rebound of the greenback, is pulling down gold with the price now once again close to the key support level of $1,500,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades.

Against the backdrop of a series of gains in U.S. stocks, amid the hope for a near-term, partial Sino-American pact, gold is facing its stiffest challenge in several sessions, commodity experts said.

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