By Sherin Elizabeth Varghese
(Reuters) – Gold prices edged higher on Tuesday as investors awaited the outcome of U.S.-China trade talks and the Federal Reserve’s policy meeting.
Spot gold rose 0.4% to $3,327.69 per ounce, by 01:46 p.m. ET (1746 GMT). Prices hit their lowest point since July 9 on Monday after a framework trade deal between the United States and the European Union dampened safe-haven demand for the yellow metal.
U.S. gold futures settled 0.4% higher at $3,324.
China and the United States will push for the continued pause of U.S. reciprocal tariffs on Chinese goods as well as China’s countermeasures, top trade negotiator Li Chenggang said after the two sides concluded negotiations in Stockholm.
Analysts note that recent U.S. deals with the EU and Japan offered some relief, but talks with China remain far more complex and prolonged.
“Given the risk of a breakdown in talks, some investors still feel that it may be appropriate to have some exposure to haven assets in case things turn sour again,” Fawad Razaqzada, market analyst at City Index and FOREX.com said.
On the U.S. interest rate front, the U.S. central bank’s two-day policy meeting will conclude on Wednesday, 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 boost 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 edged up 0.1% to $38.19 per ounce, palladium gained 0.9% to $1,257.41, while platinum climbed 0.7% to $1,399.70.
(Reporting by Sherin Elizabeth Varghese in Bengaluru, additional reporting by Sarah Qureshi; Editing by Shailesh Kuber and Vijay Kishore)
