By: Economy Middle east

Gold prices retreated after edging higher in Thursday’s early trading, as investors awaited the outcome of trade talks between U.S. President Donald Trump and Chinese leader Xi Jinping.

In Dubai, gold rates inched up, with 24-carat gold gaining AED2.75 to AED479 and 22-carat gold rising AED2.5 to AED443.5. Additionally, 21-carat gold edged up AED2.5 to AED425.25, and 18-carat gold gained AED1.75 to AED364.25.

Globally, spot gold fell 0.90 percent to $3,950.76 per ounce as of 5:32 GMT, while U.S. gold futures for December delivery eased 0.59 percent to $3,977.10 per ounce.

The U.S. dollar index fell 0.23 percent after hitting a two-week high in the previous session, making gold less expensive for other currency holders.

Gold falls as December rate cut hopes ease

Gold prices have faced several headwinds this week. The prospect of a U.S.-China trade deal has reduced the trade and geopolitical premium, while the Federal Reserve’s hawkish rate cut and the lower chances of another reduction in December are both bearish for the metal.

Given these factors, gold prices may continue to retreat in the near term, though their longer-term trend remains upward, said analysts.

The U.S. Federal Reserve lowered interest rates by a quarter percentage point for the second time this year, setting the benchmark overnight rate within a target range of 3.75 percent to 4.00 percent.

Fed Chair Jerome Powell noted that policymakers remain divided over the future direction of monetary policy and cautioned markets against expecting another rate cut before the year’s end.

Gold, which offers no yield, tends to perform well in periods of low interest rates and heightened economic uncertainty.

Market attention shifts to U.S.-China trade deal

Market attention is now turning to Trump’s meeting with Xi in South Korea. U.S. negotiators have indicated a desire to restore a fragile trade truce between Washington and Beijing, though tensions remain elevated, and deeper economic disputes are likely to continue between the two nations.

Trump and South Korean President Lee Jae Myung finalized the details of a trade agreement during their meeting, and the U.S. president also expressed optimism regarding his upcoming talks with Chinese President Xi.

Other precious metals

As gold prices declined, the precious metals market saw mixed movement on Thursday. Spot silver dipped 0.18 percent to $47.47, while platinum surged 0.54 percent to $1,593.50. In addition, palladium gained 0.55 percent to $1,408.75.