Gold is hardly changed ahead of Fed’s rate decision
The metal is steady, after jumping almost 1% in the previous session, as progress in US-China trade talks caps gains
Gold was little changed on Monday, after an almost 1% jump in the previous session, as investors await a US Federal Reserve rate decision later in the week, while progress in US-China trade talks limited upside.
Spot gold was steady at $1,504.44/oz as of 3.25am GMT. US gold futures were up 0.1% to $1,507.20/oz.
“The market is waiting for the Fed’s take on interest rate cut and the outcome of US-China trade negotiations on November 16,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers.
The Fed is scheduled to meet on October 29 and 30, where it is expected to reduce its benchmark interest rate for the third consecutive time this year.
“The high hopes for a rate cut at the upcoming FOMC [Federal open market committee] meeting helped to light up the gold market,” AxiTrader market strategist Stephen Innes said in a note.
Gold prices surged on Friday as weak US economic data bolstered bets of monetary policy easing by the Fed.
Traders see a 90.4% chance for a 25 basis point rate cut by the US central bank at its month-end monetary policy meeting, according to CME Group’s FedWatch tool.
Innes said the gains may be limited as trade tension is not as high as it was over the northern summer
US President Donald Trump last week said the US was doing “very well” in its trade negotiations with China and that China wants to make a deal “very badly”.
The remarks boosted investors’ appetite for riskier assets, sending Asian shares to a three-month high on Monday.
Both US and China have imposed a series of tit-for-tat tariffs over the past 15 months, stirring global recessionary fears and driving gold prices over 17% higher this year, but the recent development has put a lid on the gold’s gain.
Gold prices were also being weighed by a strong dollar, which makes the metal expensive for buyers holding other currencies.
The dollar index, which measures the greenback against a basket of other currencies, was slightly up on Monday morning after rising nearly 0.6% last week.
Meanwhile, the EU agreed on Friday to London’s request for a Brexit deadline extension but set no new departure date, giving Britain’s divided parliament time to decide on Prime Minister Boris Johnson’s call for a snap election.
Elsewhere, silver fell 0.2% to $17.98/oz. Platinum was flat at $926.25/oz, while palladium rose 0.5% to $1,773/oz.