October 28, 2019
Gold steady as investors wait for Feds take on rate cut
(Reuters) - Gold was little changed on Monday, after a near 1% jump in the previous session, as investors awaited a U.S. Federal Reserve rate decision later in the week, while progress in U.S.-China trade talks limited upside.
Spot gold was steady at $1,504.44 per ounce as of 0326 GMT. U.S. gold futures were up 0.1% to $1,507.20 per ounce.
"The market is waiting for the Fed's take on interest rate cut and the outcome of U.S.-China trade negotiations on Nov. 16" said Ronald Leung, chief dealer at Lee Cheong Gold Dealers.
The Fed is scheduled to meet on Oct. 29 and Oct. 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 meeting helped to light up the gold market," AxiTrader market strategist Stephen Innes said in a note.
Gold prices surged on Friday as weak U.S. 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 U.S. central bank at its month-end monetary policy meeting, according to CME Group’s FedWatch tool.
"But gains may be limited as trade tensions are not as tense as they were over the summer," Innes said.
U.S. President Donald Trump last week said the U.S. 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 U.S. 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 yellow metal'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 European Union 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 per ounce. Platinum was flat at $926.25 per ounce, while palladium rose 0.5% to $1,773 per ounce.