Gold rises on bargain hunting and US rate cut, set for monthly gain
Bullion has gained 4.5% so far this month
[BENGALURU] Gold prices edged higher on Friday (Oct 31), and were on track for a third straight monthly gain, as bargain hunting and a US Federal Reserve interest rate cut lifted demand, while investors digested a tentative trade deal between China and the US.
Spot gold was up 0.3 per cent at US$4,034 per ounce, as at 9.09 am. Bullion has gained 4.5 per cent so far this month.
US gold futures for December delivery slipped 1.1 per cent to US$3,955 per ounce.
On Wednesday, the US central bank cut interest rates by a quarter of a percentage point for the second time this year, taking the benchmark overnight rate to a target range of 3.75 to 4 per cent.
Non-yielding gold thrives in a low interest rate environment and during economic uncertainties.
Traders have scaled back bets that the Fed will cut rates again at its next policy meeting on Dec 10 after remarks from Fed chair Jerome Powell.
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Markets are now pricing in a 74.8 per cent probability of a 25-basis-point cut from the Fed in December compared with a 91.1 per cent chance a week ago, according to the CME Group’s FedWatch tool.
Keeping gold’s gains in check, the US dollar index held near its highest level in three months against its rivals, making bullion more expensive for other currency holders.
US President Donald Trump said on Thursday that he had agreed with Chinese President Xi Jinping to trim tariffs on China in exchange for Beijing cracking down on the illicit fentanyl trade, resuming US soybean purchases and keeping rare earths exports flowing.
Global gold demand rose 3 per cent year on year to 1,313 metric tonnes, the highest quarterly number on record, in the third quarter as investment demand soared, the World Gold Council said on Thursday.
Meanwhile, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.42 per cent to 1,040.35 tonnes on Thursday from 1,036.05 tonnes on Wednesday.
Elsewhere, spot silver was steady at US$48.92 per ounce, platinum rose 0.2 per cent to US$1,613.50 and palladium climbed 2.1 per cent to US$1,474.5174. REUTERS
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