Commodities: Trader caution on US-China trade and weak Chinese import data drag

Commodities gave back some of the prior Friday's gains with traders cautious as analysts pointed out that things could still change for the worse over the next three to five weeks as US and China tried to put their mini-trade deal into writing.

Also weighing on sentiment was data out overnight from China's trade and customs administration revealing a year-on-year decline of 8.5% in Chinese imports (consensus: -6.0%).

Against that backdrop, mid-morning on Monday, Bloomberg reported that China wanted to hold more talks before its leader Xi Jinping would agree to sign the first phase of a trade deal with Washington.

"Last week’s optimism for progress in the US/China trade talks was knocked today following comments from China that it wants further talks before signing the “phase 1” deal. While the headline is not entirely negative, the knee jerk reaction to this further delay saw equities turn south, the USD firm and copper fall back to 5,740 area before recovering through the pm session," said traders at Sucden Financial.

Against that backdrop, as of 1904 BST the spot US dollar index was edging up by 0.17% to 98.4720, while the US dollar spot index was down by 0.40% at 78.52.

Nonetheless, both the editor-in-chief of China's state-owned Global Times and Taoran Notes, an official blog focused on trade, said that a breakthrough had indeed been made and that Washington and Beijing were on the same page.

Even so, front month Brent crude oil futures slipped 2.18% to trade at $59.19 a barrel on the ICE and three-month LME copper ended the day at $5,618 after having started out from $5,805.

Soft commodities such as ICE traded cocoa and cotton were also moving lower, by 2.27% and 1.69%, respectively.

December gold futures on COMEX on the other hand were adding 0.57% to $1,497.20/oz..