Gold steady as investors wait for Fed's take on rate cut

Gold was little changed on Monday, after a near one percent jump in the previous session, as investors awaited a US Federal Reserve rate decision later in the week.

Spot gold was steady at $1,504.44 per ounce as of 0326 GMT. US gold futures were up 0.1 percent to $1,507.20 per ounce.

"The market is waiting for the Fed's take on interest rate cut and the outcome of US-China trade negotiations on Nov. 16" said Ronald Leung, chief dealer at Lee Cheong Gold Dealers.

The Fed is scheduled to meet on Oct. 29 and Oct. 30, where it is expected to reduce its benchmark interest rate for the third consecutive time this year.

"The high hopes for a rate cut at the upcoming FOMC meeting helped to light up the gold market," AxiTrader market strategist Stephen Innes said in a note.

Gold prices surged on Friday as weak US economic data bolstered bets of monetary policy easing by the Fed.

Traders see a 90.4 percent chance for a 25 basis point rate cut by the US central bank at its month-end monetary policy meeting, according to CME Group’s FedWatch tool.

"But gains may be limited as trade tensions are not as tense as they were over the summer," Innes said.

Gold prices were also being weighed by a strong dollar, which makes the metal expensive for buyers holding other currencies.

The dollar index, which measures the greenback against a basket of other currencies, was slightly up on Monday morning after rising nearly 0.6 percent last week.

Elsewhere, silver fell 0.2 percent to $17.98 per ounce. Platinum was flat at $926.25 per ounce, while palladium rose 0.5 percent to $1,773 per ounce.