PRECIOUS-Gold rebounds on bargain-hunting, softer dollar

By Brijesh Patel

Oct 22 (Reuters) - Gold prices rose on Wednesday, helped by a weaker dollar and bargain-hunting after a sharp loss the previous day, with investor attention turning to the delayed release of September U.S. inflation data on Friday.

Spot gold XAU= was up 0.5% at $4,145.35 per ounce, as of 0521 GMT. Bullion fell more than 5% on Tuesday in its steepest drop since August 2020.

U.S. gold futures GCcv1 for December delivery climbed 1.2% to $4,159.60 per ounce.

The dollar index .DXY was down 0.1% against its rivals, making gold less expensive for other currency holders. USD/

The September U.S. consumer price report expected on Friday will provide cues on the Federal Reserve's interest rate-cut path. The report has been delayed due to the U.S. government shutdown.

"Simmering of trade tensions between the U.S. and China was the snowflake which caused the avalanche and reversal of gold's momentum trade," said StoneX senior analyst Matt Simpson.

"This is simply a technical repositioning on a market that clearly needed a pullback after an extended move above $4,000. I suspect we've seen the worst of the day-to-day volatility as dips will still likely be bought."

U.S. President Donald Trump said he expected to reach a fair trade deal with Chinese President Xi Jinping when the two meet next week in South Korea, and played down the risks of a clash over the issue of Taiwan.

New Delhi and Washington are nearing a long-stalled trade agreement that would reduce U.S. tariffs on Indian imports to 15% to 16% from 50%, India's Mint newspaper reported.

Gold prices have risen about 56% this year, reaching an all-time peak of $4,381.21 on Monday, bolstered by geopolitical and economic uncertainties, sustained central bank buying, and rate-cut bets.

The Fed will lower its key interest rate by 25 basis points next week and again in December, according to a Reuters poll of economists who remain deeply divided on where rates will be by the end of next year.

Elsewhere, spot silver XAG= edged 0.5% higher to $48.95 per ounce, platinum XPT= fell 1.1% to $1,534.20 and palladium XPD= gained 1.4% to $1,427.13.

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