Gold prices inched up on Wednesday, supported by a weaker dollar on hopes of a deal between the United States and China over a long-drawn trade war, but improved risk appetite capped bullion's gains. Spot gold was up 0.1 percent to $1,312.36 per ounce, as of 0832 GMT, while US gold futures gained 0.1 percent to $1,315.3 an ounce.
US President Donald Trump said on Tuesday that he could see letting the March 1 deadline for reaching a trade agreement with Beijing slide a little if the two sides were close to hammering out a deal to end their long-drawn trade tussle. US tariffs on $200 billion worth of imports from China are scheduled to rise to 25 percent from 10 percent if the two sides cannot reach a deal by the deadline, increasing pain and costs in sectors from consumer electronics to agriculture.
"There is very little detail behind some of those (Trump's) comments... There has been nothing really strong enough to drive any strong conviction (for investors)," said ANZ analyst Daniel Hynes. However, improved risk appetite limited bullion's gains, with Asian stocks edging higher to a more than four-month peak.
"The safe-haven buying that we saw earlier in the month is now a little more fragile (after recent developments in trade talks)," Hynes said. Investors were also worried after Trump said on Tuesday he was unhappy with a deal struck by congressional negotiators on border security that denied him funds for his US-Mexican border wall.
Standing at $1,300, gold is getting support from a weaker dollar, but lacks enough momentum, Wing Fung said. Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.4 percent on Tuesday. Holdings are down about 3 percent so far this month after four straight monthly gains.
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