Gold holds gains as dollar weakens ahead of US-China trade talks

Gold prices consolidated on Thursday, as a weaker dollar boosted demand for the metal while traders kept a keen eye on the US China meeting for signs of commercial diplomacy progress.

Gold was trading around $3,950 per troy ounce during Asian hours today.

It has been observed that gold prices are supported by central bank purchases and resumed ETF inflows, which have limited the supply of metal in both official and exchange channels.

Keeping in line with Jerome Powell remarks at the post-meeting press conference, Fed emphasized that another rate cut in December is still a long way off and that the path forward remains unresolved.

According to observations, the government shutdown will have a severe impact on economic activity but the effects are reversible once it ends.

The Fed further confirmed that it will continue to reduce its Quantitative Easing (QE) by shifting its balance sheet holdings from mortgage-backed securities to long-term Treasuries by December.

This significant shift has created a slump in easy-money environments, with markets facing downward pressure as investors anticipate higher returns and a stronger US Dollar (USD).

The immediate outlook for precious metals like gold remains volatile, fueled by the recent meeting between the United States President Donald Trump and Chinese President Xi Jinping, as well as how the market interprets current trade progress and recent comments from Federal Reserve officials.