PRECIOUS-Gold steady as traders assess further rate cuts, set for third monthly rise

By Noel John and Pablo Sinha

Oct 31 (Reuters) - Gold prices held steady above $4,000 an ounce on Friday as traders weighed uncertainty around another interest rate cut by the U.S. Federal Reserve this year, but the metal remained poised for a third straight monthly gain.

Spot gold XAU= was steady at $4,023.44 per ounce at 9:32 a.m. ET (1332 GMT), after falling to $3,988.37 earlier in the session. Prices were on track for a gain of 4% this month.

U.S. gold futures GCcv1 for December delivery were up 0.5% at $4,035.30 per ounce.

The dollar index .DXY held near a three-month high, making greenback-priced bullion more expensive for other currency holders. USD/

"A lot of traders have been waiting on the sidelines to reallocate back into the gold market. I think they did that below the $4,000 mark," said Phillip Streible, chief market strategist at Blue Line Futures.

The U.S. Federal Reserve lowered interest rates on Wednesday, but hawkish remarks from Chair Jerome Powell have caused traders to dial back bets on another cut in December.

Gold loses its appeal when interest rates are higher, as it is a non-yielding asset. The metal has gained 53% this year, hitting a record high of $4,381.21 on October 20.

Morgan Stanley on Friday said it continues to see upside for gold on interest rate cuts, ETF inflows, central bank purchases and ongoing economic uncertainty. The bank expects gold to average $4,300 in the first half of 2026.

U.S. President Donald Trump said on Thursday he would trim tariffs on China to 47% from 57% in exchange for Beijing cracking down on illicit fentanyl trade, resuming U.S. soybean purchases and keeping rare earths exports flowing.

Elsewhere, spot silver XAG= rose 0.1% to $48.93 per ounce, platinum XPT= lost 1.7% to $1,583.80, while palladium XPD= gained 1.4% to $1,464.75.