Oct 31 (Reuters) - Gold prices edged higher on Friday,
and were on track for a third straight monthly gain, as bargain
hunting and a Federal Reserve interest rate cut lifted demand,
while investors digested a tentative trade deal between China
and the U.S.
FUNDAMENTALS
* Spot gold was up 0.3% at $4,034 per ounce, as of
0109 GMT. Bullion has gained 4.5% so far this month.
* U.S. gold futures for December delivery slipped
1.1% to $3,955 per ounce.
* On Wednesday, the U.S. central bank cut interest rates by
a quarter of a percentage point for the second time this year,
taking the benchmark overnight rate to a target range of
3.75%-4.00%.
* Non-yielding gold thrives in a low interest rate
environment and during economic uncertainties.
* Traders have scaled back bets that the Fed will cut rates
again at its next policy meeting on December 10 after remarks
from Fed Chair Jerome Powell.
* Markets are now pricing in a 74.8% probability of a
25-basis-point cut from the Fed in December compared with a
91.1% chance a week ago, according to the CME Group's FedWatch
tool.
* Keeping gold's gains in check, the dollar index
held near its highest level in three months against its rivals,
making bullion more expensive for other currency holders.
* U.S. President Donald Trump said on Thursday he had agreed
with Chinese President Xi Jinping to trim tariffs on China in
exchange for Beijing cracking down on the illicit fentanyl
trade, resuming U.S. soybean purchases and keeping rare earths
exports flowing.
* Global gold demand rose 3% year-on-year to 1,313 metric
tons, the highest quarterly number on record, in the third
quarter as investment demand soared, the World Gold Council said
on Thursday.
* Meanwhile, SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, said its holdings rose 0.42%
to 1,040.35 tons on Thursday from 1,036.05 tons on Wednesday.
* Elsewhere, spot silver was steady at $48.92 per
ounce, platinum rose 0.2% to $1,613.50 and palladium
climbed 2.1% to $1,474.5174.
DATA/EVENTS (GMT)
0130 China NBS Manufacturing PMI Oct
0700 UK Nationwide house price mm, yy Oct
0745 France CPI (EU Norm) Prelim MM, YY Oct
0745 France CPI Prelim MM, YY NSA Oct
0745 France Producer Prices YY Sep
1000 EU HICP Flash YY Oct
1000 EU HICP-X F,E,A,T Flash MM, YY Oct
(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu
Sahu)
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