Gold is shining and heading for monthly gains

Gold prices rose today, on their way to achieving gains for the third month in a row, with increased demand for gold in search of profitable deals and after the reduction of US interest rates, at a time when investors are evaluating the repercussions of the temporary trade agreement between China and the United States.

By 01:09 GMT, spot gold rose 0.3 percent to $4,034 per ounce.

The precious metal has gained 4.5 percent so far this month.

While US gold futures for December delivery fell 1.1 percent to $3,955 an ounce.

On Wednesday, the US Central Bank reduced interest rates by a quarter of a percentage point for the second time this year, with the benchmark overnight interest rate ranging between 3.75 percent and four percent.

Non-yielding gold thrives in a low interest rate environment and during times of economic uncertainty.

According to the CME’s Fed Watch tool, markets expect 74.8 percent to cut interest rates by 25 basis points at the Federal Reserve meeting in December, compared to 91.1 percent a week ago, after statements by Chairman Jerome Powell in which he reduced expectations for another cut.

The dollar index stabilized near its highest levels in three months against other currencies, making gold more expensive for holders of other currencies.

US President Donald Trump said on Thursday that he agreed with Chinese President Xi Jinping to reduce customs duties on China in exchange for Beijing combating the illegal fentanyl trade, resuming purchases of US soybeans, and maintaining the flow of rare earth mineral exports.

As for other precious metals, silver settled in spot transactions at $48.92 per ounce, platinum rose 0.2 percent to $1,613.50, and palladium increased 2.1 percent to $1,474.51.