Gold Prices Rebound as Fed Rate Cut and Trade Uncertainty Boost Safe-Haven Demand

Gold prices edged higher in Asian trading on Thursday, snapping a four-day losing streak as the Federal Reserve’s expected rate cut and uncertainty surrounding U.S.-China trade talks provided support. Spot gold climbed 1% to $3,967.03 an ounce at 02:51 ET (06:51 GMT), while U.S. gold futures slipped 0.4% to $3,983.10. The yellow metal had fallen for four consecutive sessions, hitting a three-week low earlier this week after plunging from last week’s record high above $4,300 per ounce amid heavy profit-taking and reduced safe-haven demand.

The Fed’s decision to trim its benchmark interest rate by 25 basis points to 3.75%-4.00% briefly pressured the dollar, lending support to non-yielding bullion. However, gains were limited after Fed Chair Jerome Powell signaled that another rate cut in December was “far from a foregone conclusion.” His cautious remarks dampened investor optimism for a longer easing cycle, tempering gold’s rally.

Meanwhile, geopolitical developments added further support. Former U.S. President Donald Trump and Chinese President Xi Jinping met in Busan, South Korea, where Trump described the talks as “amazing.” The two leaders reportedly agreed to reduce U.S. tariffs on Chinese goods from 57% to 47%, with China pledging to increase U.S. soybean imports and ease restrictions on rare-earth exports. Still, markets were left seeking concrete details, especially on key issues like semiconductor and agricultural trade.

The lack of clarity in trade policy, combined with the Fed’s dovish stance, lifted gold off recent lows below $3,900. Elsewhere, silver futures dipped 0.7% to $47.605 per ounce, platinum futures rose 0.7% to $1,594.80, and copper prices retreated after hitting a record high on the London Metal Exchange due to supply disruptions and profit-taking.