PRECIOUS-Gold ticks up on dollar retreat, Fed rate cut

Oct 30 (Reuters) - Gold prices edged higher on Thursday, as a slight pullback in the dollar and a widely expected quarter percentage point rate cut from the U.S. Federal Reserve lifted demand.

FUNDAMENTALS

Spot gold XAU= was up 0.4% at $3,942.97 per ounce, as of 0050 GMT. U.S. gold futures GCcv1 for December delivery slipped 1.1% to $3,955 per ounce.

The U.S. central bank cut interest rates by a quarter of a percentage point for the second time this year, bringing the benchmark overnight rate to a target range of 3.75%–4.00%.

Fed Chair Jerome Powell said officials are struggling to reach a consensus about what lies ahead for monetary policy and that financial markets should not assume another rate cut will happen at the end of the year.

Non-yielding gold thrives in a low interest rate environment and during economic uncertainties.

The dollar index .DXY fell 0.2% after hitting a two-week high against its rivals in the previous session, making gold less expensive for other currency holders. USD/

Focus now shifts to U.S. President Trump's meeting with Chinese leader Xi Jinping in South Korea later in the day.

U.S. negotiators have signalled they seek a return to a fragile trade war truce, but tensions remain high and longer-term economic irritants will likely persist between the geopolitical rivals.

Trump and South Korean President Lee Jae Myung finalised details of their fraught trade deal at a summit in South Korea, and the U.S. president also sounded an optimistic note about a looming summit with China's Xi Jinping.

SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.28% to 1,036.05 metric tons on Wednesday from 1,038.92 tons on Tuesday.

Elsewhere, spot silver XAG= gained 0.4% to $47.71 per ounce, platinum XPT= rose 0.6% to $1,594.90 and palladium XPD= climbed 0.8% to $1,411.51.

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