By Brijesh Patel
(Reuters) -Gold prices rose on Thursday, supported by dollar weakness and a Federal Reserve rate cut, while investors remained cautious about the outcome of a trade agreement between the presidents of the U.S. and China.
Spot gold rose 0.9% to $3,964.09 per ounce as of 0642 GMT. U.S. gold futures for December delivery slipped 0.6% to $3,977.10 per ounce.
The dollar index fell 0.2% after hitting a two-week high against its rivals on Wednesday, making gold more affordable for holders of other currencies. [USD/]
“There’s no catalyst for the rally other than a bit of a technical bounce. A lot has gone against gold this week. The looming U.S.-China trade deal diminishes trade and geopolitics as a tailwind,” said Capital.com analyst Kyle Rodda.
“The hawkish cut from the Federal Reserve and the drop in the odds for another rate cut in December are also negative for gold. I think gold could keep pulling back given this dynamic. Although, in the long run the trend is to the upside for gold.”
The U.S. central bank cut rates by a quarter of a percentage point on Wednesday for the second time this year, taking the benchmark overnight rate to a target range of 3.75%–4.00%.
Fed Chair Jerome Powell said officials are struggling to reach a consensus about what lies ahead for monetary policy and cautioned that markets should not assume another rate cut in December.
Non-yielding gold thrives in a low-interest-rate environment and during economic uncertainties.
Meanwhile, Trump said he had struck a deal to lower tariffs on China in exchange for Beijing resuming U.S. soybean purchases, keeping rare earths exports flowing and cracking down on illicit fentanyl trade.
The remarks, after face-to-face talks with Xi in the South Korean city of Busan, marked the finale of Trump’s whirlwind Asia trip, on which he also touted trade breakthroughs with South Korea, Japan and other Southeast Asian nations.
Elsewhere, spot silver rose 0.2% to $47.65 per ounce, platinum gained 0.6% to $1,595.14 and palladium climbed 1.3% to $1,418.65.
(Reporting by Brijesh Patel in Bengaluru; Editing by Sumana Nandy and Subhranshu Sahu)
