Gold prices saw an increase on Thursday, influenced by a slight decline in the dollar and the expected quarter percentage point rate cut from the U.S. Federal Reserve, which enhanced demand. Spot gold rose by 0.4% to $3,942.97 per ounce, as of 0050. Gold futures in the U.S. for December delivery fell by 1.1%, closing at $3,955 per ounce. The U.S. central bank has lowered interest rates by 25 basis points for the second time this year, setting the benchmark overnight rate to a target range of 3.75% to 4.00%.

Fed Chair Jerome Powell noted that officials are encountering difficulties in reaching an agreement on the future direction of monetary policy, warning that financial markets should not assume that another rate cut will happen by the end of the year. Gold, lacking interest yield, often excels in settings marked by low interest rates and times of economic uncertainty. The dollar index saw a decrease of 0.2% after reaching a two-week high against other currencies in the previous session, which lowered the price of gold for those holding different currencies.

All eyes are now on the upcoming meeting between U.S. President Trump and Chinese leader Xi Jinping in South Korea later today. U.S. negotiators have expressed a wish to reinstate a fragile trade war truce; nonetheless, underlying tensions persist, and lasting economic frictions are anticipated to endure between the geopolitical rivals. Trump and South Korean President Lee Jae Myung wrapped up the complex discussions of their trade agreement during a summit in South Korea, while the U.S. president conveyed optimism about an upcoming meeting with China’s Xi Jinping.

SPDR Gold Trust, the leading gold-backed exchange-traded fund worldwide, announced a reduction in its holdings by 0.28%, resulting in a total of 1,036.05 metric tons on Wednesday, down from 1,038.92 tons on Tuesday. Elsewhere, spot silver gained 0.4% to $47.71 per ounce, platinum rose 0.6% to $1,594.90, and palladium climbed 0.8% to $1,411.51.