U.S. stock futures rise after U.S.-Japan trade deal; Tesla, Alphabet earnings due
* Traders see 90.4% chance for a 25 bps rate cut this week
(Updates prices)
By Diptendu Lahiri
Oct 28 (Reuters) - Gold inched up on Monday, after a near 1%
jump in the previous session, as investors awaited a U.S.
Federal Reserve rate decision later in the week, while progress
in U.S.-China trade talks curbed appetite for safe haven assets.
Spot gold XAU= rose 0.2% to $1,506.95 per ounce as of 0700
GMT. U.S. gold futures GCcv1 were up 0.3% at $1,509.60 per
ounce.
"All eyes are on the Fed meeting now, but what investors are
really looking forward to is some clarity on whether the central
bank will continue to remain dovish for the rest of this year,"
said John Sharma, an economist with National Australia Bank,
adding that the current take on gold is "wait and see".
The Fed is scheduled to meet on Oct. 29 and Oct. 30, with
traders seeing a 90.4% chance for a 25 basis point rate cut,
according to CME Group's FedWatch tool. The U.S. central bank
has already lowered interest rates twice this year. FEDWATCH
"Gains (if the Fed cut rates this week) may be limited as
trade tensions are not as tense as they were over the summer,"
AxiTrader market strategist Stephen Innes said in a note.
U.S. President Donald Trump last week said the U.S. was
doing very well in its trade negotiations with China and that
China wants to make a deal "very badly." The remarks boosted investors' appetite for riskier assets,
sending Asian shares to a three-month high on Monday.
Both U.S. and China have imposed a series of tit-for-tat
tariffs over the past 15 months, stirring global recessionary
fears and driving gold prices more than 17% higher this year,
but the recent development has put a lid on gains.
However, NAB's Sharma said "any development on the trade war
front will just have an interim effect on gold."
"The situation is far more complicated to be solved in a
hurry."
Gold prices were also being weighed by a strong dollar,
which makes the metal expensive for buyers holding other
currencies.
The dollar index .DXY , which measures the greenback
against a basket of other currencies, was slightly up on Monday
morning after rising nearly 0.6% last week.
Meanwhile, the European Union agreed on Friday to London's
request for a Brexit deadline extension but set no new departure
date, giving Britain's divided parliament time to decide on
Prime Minister Boris Johnson's call for a snap election.
Elsewhere, silver XAG= rose 0.4% to $18.09 per ounce.
Platinum XPT= was up 0.2% at $927.73 per ounce, while
palladium XPD= rose 0.8% to $1,777.08 per ounce.