PRECIOUS-Gold: US rate break expectations exceed US $ 1,300

January 28 (Reuters) – Gold tumbled on Monday after signing an agreement to reopen the US government, but prices exceeded the key level of US $ 1,300, hoping the US Federal Reserve will keep its rates unchanged this week.

FUNDAMENTALS

* Spot gold fell 0.1% to 1 0114 GMT to settle at $ 1,301.37, while US gold futures rose 0.2% to US $ 1,300.61 per ounce.

* Asian stocks advanced on Monday after Wall Street resumed after an agreement was announced on the US government's reopening following a prolonged shutdown that had shaken investor sentiment.

* The closure added to the concerns of investors already worried about the slowdown in global growth, the signs of tension on corporate earnings and a Sino-US trade war still unresolved.

* The focus is on the Fed meeting this week, at which the US central bank should leave its interest rates unchanged. The meeting of the Federal Open Market Committee is scheduled for January 29th and 30th.

* Fed raised interest rates four times last year and announced it would likely increase borrowing costs twice in 2019, although some central bank officials said they would wait for a rise in rates.

* Spot gold rose 1.8% on Friday, its best gain in a day since Oct. 11, its highest level since June 14, 2018. The metal also exceeded the psychological level of $ 1,300. after failing repeatedly because of strong technical resistance.

* Gold tends to appreciate on the lower interest rate forecast, which reduces the opportunity cost of holding unproductive bullion.

* China will take steps to spur growth in the context of a trade war with the United States, but the possibilities for aggressive stimulus are limited in an already heavily indebted economy and a real estate market prone to rises provoked by credit, insiders said.

* The demand for physical gold in India has improved slightly last week, with local prices rising from their highest level in over five years, while purchases picked up strength in China before Lunar New Year festival.

* The holdings of SPDR Gold, the largest gold-based exchange-traded fund, have hovered around their highest levels since the end of June 2018. (Nallur Sethuraman Report to Bengaluru, edited by Joseph Radford)