Gold prices inched higher on Monday in Asia as traders digested the latest trade news happened over the weekend.
U.S. Gold Futures rose 0.2% to $1,513.95 by 1:05 AM ET (05:05 GMT).
On Saturday, a government statement out of China said that Beijing had reached consensus with the U.S. in principle on issues related to a trade deal the two sides were negotiating.
China's Vice Premier Liu He had a phone call with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Friday where the two sides conducted “serious and constructive” discussions on “core” trade points, while discussing arrangements on the next consultation, the statement said.
But analysts at National Australia Bank sounded a note of caution.
"As much as the U.S.-China trade updates continue to point to a Phase 1 deal looking like a certainty, the contentious issues on whether the U.S. will cancel the planned December tariffs and remove some of the current tariffs in line with China's demands remains an unknown and if the issue is not resolved then a deal could easily collapse," they said.
The U.S. Federal Reserve’s decision to cut rates by 25-basis point also remained in focus.
Some expected the yellow metal to trade significantly lower after the Federal Reserve indicated it will pause further rate cuts.
Instead, gold held to its $1,500 perch, proving few were willing to abandon the yellow metal.
“It is likely the majority of investors have opted to hold onto their precious metal exposure as increased data dependency and persistent inflation weakness leaves the door open for further cuts into 2020,” the brokerage said.
“As the outlook becomes more data dependent moving forward, we expect the yellow metal to be fairly volatile on either side of $1,500/oz, until a trend of weaker data sparks further cuts in 2020,” it added.
