Gold steadies ahead of Fed verdict; trade optimism limits upside

Gold prices inched higher on Wednesday, ahead of a widely expected interest rate cut from the Federal Reserve, although easing US-China trade tensions kept bullion strength in check. Spot gold was up 0.2% at $3,957.42 per ounce, as of 0257 GMT, after dropping to its lowest point since October 7 on Tuesday. U.S. gold futures for December delivery eased 0.3% to $3,971.20 per ounce. “The fuel for this short-term correction in gold is a readjustment of safe-haven instrument towards more response instrument like global equities due trade optimism,” OANDA senior market analyst Kelvin Wong said. “In the near-term gold faces downside pressure due to position adjustment from short-term leverage players and technical levels that’s being breached. However, the fundamentals are still bullish for gold.” Top Chinese and U.S. economic officials over the weekend hashed out the framework of a trade deal for U.S. President Donald Trump and his Chinese counterpart Xi Jinping, that would pause steeper American tariffs and Chinese rare-earths export controls.