Gold ticks up on dollar retreat, Fed rate cut

Gold prices edged higher on Thursday, as a slight pullback in the dollar and a widely expected quarter percentage point rate cut from the U.S. Federal Reserve lifted demand.

FUNDAMENTALS

* Spot gold was up 0.4% at $3,942.97 per ounce, as of 0050 GMT. U.S. gold futures for December delivery slipped 1.1% to $3,955 per ounce.

* The U.S. central bank cut interest rates by a quarter of a percentage point for the second time this year, bringing 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 that financial markets should not assume another rate cut will happen at the end of the year. * Non-yielding gold thrives in a low interest rate environment and during economic uncertainties.
* The dollar index fell 0.2% after hitting a two-week high against its rivals in the previous session, making gold less expensive for other currency holders.
* Focus now shifts to U.S. President Trump’s meeting with Chinese leader Xi Jinping in South Korea later in the day.
* U.S. negotiators have signalled they seek a return to a fragile trade war truce, but tensions remain high and longer-term economic irritants will likely persist between the geopolitical rivals.

* Trump and South Korean President Lee Jae Myung finalised details of their fraught trade deal at a summit in South Korea, and the U.S. president also sounded an optimistic note about a looming summit with China’s Xi Jinping.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.28% to 1,036.05 metric tons on Wednesday from 1,038.92 tons on Tuesday.

* Elsewhere, spot silver gained 0.4% to $47.71 per ounce, platinum rose 0.6% to $1,594.90 and palladium climbed 0.8% to $1,411.51.

DATA/EVENTS (GMT)

0630 France GDP Preliminary QQ Q3

0855 Germany Unemployment Chg SA Oct

0855 Germany Unemployment Rate SA Oct

0900 Germany GDP Flash QQ SA, YY NSA Q3

1000 EU GDP Flash Prelim YY, QQ Q3

1000 EU Consumer Confid. Final Oct

1000 EU Unemployment Rate Sep

1300 Germany CPI Prelim YY Oct

1300 Germany HICP Prelim YY Oct

1315 EU ECB Refinancing Rate Oct

1315 EU ECB Deposit Rate Oct