PRECIOUS-Gold falls as Fed rate outlook disappoints

* Gold has climbed about 0.6% this month
* U.S. central bank reduces borrowing costs modestly
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

(Updates prices)
By Sethuraman N R
July 31 (Reuters) - Gold prices fell on Wednesday after the
U.S. Federal Reserve cut interest rates for the first time since
2008, as markets priced in the move and a lack of dovish outlook
failed to cheer investors.
Financial markets had widely expected the
quarter-percentage-point rate cut, which lowered the U.S.
central bank's benchmark overnight lending rate to a target
range of 2.00% to 2.25%.
The Fed said it will "continue to monitor" how incoming
information will affect the economy, adding that it "will act as
appropriate to sustain" a record-long U.S. economic expansion.
Spot gold XAU= was down 0.8% at $1,417 an ounce at 2:38
p.m. EDT (1838 GMT), while U.S. gold futures GCcv1 were also
down 0.8% at $1,418.30. Spot gold prices fell 1% to an intra-day
low of $1415.87 after the Fed announcement.
"The market was looking for a dovish cut and did not get it
... And language in statement did not strongly indicate
forthcoming cuts even though the door is open," said Tai Wong,
head of base and precious metals derivatives trading at BMO
Expectations for an interest rate cut by the Fed and other
leading central banks, which would cut the opportunity cost of
holding nonyielding gold, have put the metal on track for a 0.6%
gain for July.
"Aside from the FOMC meeting, there remain a number of
ongoing risk events to provide price direction to bullion,
namely the increasing likelihood of a no-deal Brexit and a lack
of progress between the U.S. and China in trade negotiations,"
MKS PAMP said in a note.
U.S. President Donald Trump warned China against waiting out
his presidency before finalising a trade deal, saying the
outcome could be no agreement or a harsher one if he wins
re-election in November 2020. "So far, because of the fact (bond) yields have been falling
and the technical structure has been bullish, traders have been
happy to pick gold at the dips," said Fawad Razaqzada, market
analyst with Forex.com.
Among other precious metals, silver XAG= fell 0.9% to
$16.43 an ounce, and platinum XPT= jumped 0.9% to $873.85 per
ounce, both on track for a second straight month of gains.
Palladium XPD= rose 0.7% to $1,537 per ounce.