Gold prices rose on Wednesday, helped by a weaker dollar and bargain-hunting after a sharp drop in the last session, while investors awaited U.S. inflation data for more cues on the Federal Reserve's interest rate-cut path.
Spot gold was up 0.6 percent at US$4,146.47 (HK$32,342.5) per ounce, as of 0636 GMT. Bullion fell more than 5 percent on Tuesday in its steepest drop since August 2020.
U.S. gold futures for December delivery climbed 1.3 percent to US$4,160.40 per ounce.
The dollar index was down 0.1 percent against its rivals, making gold less expensive for other currency holders.
The September U.S. consumer price report is expected on Friday after a delay due to the federal government shutdown.
"Simmering of trade tensions between the U.S. and China was the snowflake which caused the avalanche and reversal of gold's momentum trade," said StoneX senior analyst Matt Simpson.
"This is simply a technical repositioning on a market that clearly needed a pullback after an extended move above US$4,000. I suspect we've seen the worst of the day-to-day volatility as dips will still likely be bought."
U.S. President Donald Trump said he expected to reach a fair trade deal with Chinese President Xi Jinping when the two meet next week in South Korea, and played down the risks of a clash over the issue of Taiwan.
New Delhi and Washington are nearing a long-stalled trade agreement that would reduce U.S. tariffs on Indian imports to 15 percent to 16 percent from 50 percent, India's Mint newspaper reported.
Gold prices have risen about 56 percent this year, reaching an all-time peak of US$4,381.21 on Monday, bolstered by geopolitical and economic uncertainties, sustained central bank buying, and rate-cut bets.
The Fed will lower its key interest rate by 25 basis points next week and again in December, according to a Reuters poll of economists who remain deeply divided on where rates will be by the end of next year.
Elsewhere, spot silver rose 1 percent to US$49.21 per ounce, platinum fell 1.1 percent to US$1,535.05 and palladium gained 1.4 percent to US$1,427.84.
Reuters
