PRECIOUS-Gold drops from 14-month high as US-Mexico deal lifts risk assets

* Speculators raised web gold longs in week to June Four-CFTC

* U.S. Fed futures value in 2 price cuts in 2019

* GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl (Provides feedback, particulars, updates costs)

By Eileen Soreng

June 10 (Reuters) – Gold fell 1% on Monday, retreating from a 14-month peak hit within the earlier session after a deal between the US and Mexico to avert a tariff conflict prompted buyers to ditch the safe-haven metallic for riskier belongings.

Spot gold was down zero.9% at $1,328.41 per ounce as of 0952 GMT. Within the earlier session, it hit its highest since April final 12 months at $1,348.08 an oz.

U.S. gold futures fell 1.1% to $1,331.9 an oz.

The US and Mexico struck a deal on Friday to avert a tariff conflict, with the latter agreeing to broaden a controversial asylum programme and deploy safety forces to stem flows of unlawful migrants from Central America.

“The U.S.-Mexico commerce breakthrough has improved danger urge for food for buyers, because it reveals a deterioration in commerce conflict fears,” mentioned Jameel Ahmad, world head of foreign money technique and market analysis at on-line foreign currency trading dealer FXTM.

“Property resembling gold have fallen… after what has been an excellent couple of weeks for conventional protected haven belongings,” he added.

So long as gold stays above chart assist at $1,320 and $1,300, optimistic technical momentum ought to underpin costs, nonetheless, he mentioned.

Expectations that the U.S. Federal Reserve would possibly ship a price reduce are at present giving hope to gold bulls. Decrease rates of interest reduce the chance value of holding bullion, which carries no yield.

Fed fund futures now value in additional than two 25-basis level price cuts by year-end, with one virtually absolutely priced in by July. Weak information from the US and a Sino-U.S. commerce spat are clouding the worldwide financial outlook.

Speculators raised web lengthy place in COMEX gold within the week ended June Four, information from the U.S. Commodity Futures Buying and selling Fee (CFTC) confirmed on Friday.

“We anticipate costs to hover sideways from $1,300-$1,350 per ounce within the quick time period, with dangers tilted to the upside,” Howie Lee, an economist at OCBC Financial institution, mentioned in a be aware.

Amongst different valuable metals, silver shed 1.5% to $14.77 per ounce.

Platinum fell 1.Four% to $795.59 an oz, whereas palladium eased zero.5% to $1,350.70 an oz. (Reporting by Eileen Soreng and Arijit Bose in Bengaluru; Enhancing by Jan Harvey)

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