COMEX gold weakened to trade below $1350/oz Tuesday after testing 1-month high in previous session. Gold weakened on some recovery in equity market and US dollar.
European equity markets trade higher reflecting gains in Asian and US markets. US DJIA index rose 2.8% yesterday after a sharp 5.7% decline last week. Risk sentiment improved on prospect of a deal between US and China which could avert a trade war.
As per reports, US Treasury Secretary Steven Mnuchin and his Chinese counterpart have been discussing the trade deficit between the two countries and were committed to finding a mutually agreeable way to reduce the gap and help China avoid tariffs on $50 billion of exports to the US.
Trump administration was said to be urging China to lower tariffs on cars and open its market to US financial services as part of talks to resolve a rise in trade tensions.
Risk sentiment improved also on reports of surprise visit to China by North Korea's leader. This comes ahead of North Korea and US meeting to resolve issues relating to nuclear program.
While risk sentiment has improved, concerns will persist about a US led global war and its impact on global economies. Further cues will come from US economic data and comments from Fed officials.