Gold climbs 2% on Fed rate cut as investors weigh US-China trade talks

Adam

Summary:

Gold jumped nearly 2% after the Fed’s rate cut weakened the dollar, while uncertainty over the Trump-Xi trade deal spurred safe-haven demand across precious metals.

Gold prices jumped 2% 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 the presidents of the world's two largest economies.

Spot gold climbed 1.9% to $4,004.75 per ounce as of 0918 GMT. U.S. gold futures for December delivery slipped 0.4% to $4,018.30 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 U.S. central bank delivered a 25 basis point rate cut on Wednesday, taking the benchmark overnight rate to a target range of 3.75%–4.00%.

"Regarding monetary policy, traders are still pricing in a 70% probability of a cut by December despite Powell attempting to cool expectations around further rate cuts," he 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, U.S. President Donald 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.

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 1.4% to $48.22 per ounce, platinum gained 2% to $1,616.20 and palladium climbed 2.9% to $1,441.24.

Source: reuters

News, historical chart data, and fundamental company data are provided by FastBull Ltd.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.