Gold prices were trading above US$3,950 per ounce during Thursday's Asian deals as traders awaited the outcome of the high-stakes meeting between United States President Donald Trump and Chinese President Xi Jinping, while volatility following the Federal Reserve’s policy decision continued to ripple through markets.
By 4:25 pm AEDT (5:25 am GMT), spot gold rose 0.9% to US$3,962.65 per ounce, following three sessions of consecutive declines.
Earlier in the session, the Federal Reserve cut interest rates by 25 basis points as expected, pushing gold higher in the process.
However, those gains were quickly erased after Fed Chair Jerome Powell signalled a more cautious tone, suggesting that further easing in December was far from certain given the government shutdown’s potential to delay economic data releases.
According to the CME Group FedWatch Tool, traders now see a 67.8% probability that the Fed will hold rates steady at its 10 December meeting, up sharply from just 9.1% before the policy announcement.
Powell’s comments triggered a short-lived rally in the U.S. dollar, though the Greenback later gave up its gains as optimism surrounding U.S.-China trade negotiations returned to focus.
Market sentiment remains tethered to developments in South Korea, where Trump and Xi are meeting to discuss a potential trade deal.
Both sides have already reached a preliminary consensus on issues including export controls, fentanyl, and shipping levies during prior discussions in Malaysia.
Trump said earlier this week that he expects to reduce U.S. tariffs on Chinese goods in exchange for Beijing’s commitment to curb exports of precursor chemicals used in fentanyl production.
