Gold steadies with focus on US-China talks
Spot gold steadied at $3,313.63 per ounce, by 10:05 ET (14:04 GMT). Prices hit their lowest point since July 9 on Monday after a trade deal between the United States and European Union dampened safe haven demand for the yellow metal.
US gold futures was unchanged at $3,311.60. 'The lack of clear details and a defined outline of the announced trade deals... continues to keep market participants on edge,' said Zain Vawda, analyst at MarketPulse by OANDA.
Vawda added that a break below $3,300 could trigger a decline toward the $3,000 level in the medium term. US and Chinese officials held more than five hours of talks in Stockholm on Monday aimed at extending their trade truce by three months, with discussions set to resume Tuesday.
Analysts note that recent US deals with the EU and Japan offered some relief, but talks with China remain far more complex and prolonged. On the US interest rate front, the US central bank's two-day policy meeting kicks off later in the day, with rates widely expected to remain unchanged. Investors will closely scrutinize the Fed's commentary for any signals on the timing and pace of potential rate cuts ahead.
Markets are currently pricing in just under 50 basis points of rate cuts by year-end, with October seen as the most likely starting point, said Peter Grant, vice president and senior metals strategist at Zaner Metals. However, dissent from two Fed members could shift expectations toward a September cut, which could potentially boosting gold, he added.
Gold tends to benefit in a low interest rate environment as the reduced yield on competing assets makes the non-yielding metal more attractive to investors. Spot silver fell 0.5% to $37.98 per ounce, while platinum was steady at $1,389.85 and palladium slipped 1.2% to $1,232.67.
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