NEW YORK: Gold prices jumped 2percent on Thursday, helped by dollar weakness after a Federal Reserve rate cut and as investors remained uncertain regarding the outcome of a trade deal between China and the United States.
Spot gold climbed 1.3percent to USD3,980.00 per ounce as of 1109 GMT. US gold futures for December delivery slipped 0.2percent to USD3,991.50 per ounce.
“Gold appears to be pushing higher as investors digest the outcome of the Trump-Xi meeting and the Fed’s decision to cut interest rates for the second time this year,” said Lukman Otunuga, senior research analyst at FXTM.
The US central bank delivered a 25-basis-point rate cut on Wednesday, taking the benchmark overnight rate to a target range of 3.75percent–4.00percent.
“Regarding monetary policy, traders are still pricing in a 70 percent probability of a cut by December despite Powell attempting to cool expectations around further rate cuts,” Otunuga added.
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, US President Donald Trump said he had struck a deal to lower tariffs on China in exchange for Beijing resuming US soybean purchases, keeping rare earths exports flowing and cracking down on illicit fentanyl trade.
China for its part agreed to delay the introduction of its latest round of rare earth export controls, but earlier restrictions on the critical minerals that have upended global trade remain.
Trump’s remarks came after face-to-face talks with Xi in Busan, South Korea, marking the finale of his whirlwind Asia trip, on which he also touted trade breakthroughs with South Korea, Japan and Southeast Asian nations.
Elsewhere, spot silver rose 1percent to USD48.03 per ounce, platinum gained 1percent to USD1,600.66 and palladium climbed 2.9percent to USD1,441.99.
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