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Trump seeks trade truce with Xi in South Korea talks

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Fed cuts rates by a quarter of a percentage point

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Palladium gains more than 1%

(Recasts, adds comments and updates for Asia morning session)

By Brijesh Patel

Oct 30 (Reuters) - Gold prices inched higher on

Thursday, supported by a slight pullback in the dollar, while

investors waited to see if U.S. President Donald Trump and his

Chinese counterpart Xi Jinping would thrash out a trade deal.

Spot gold was up 0.2% at $3,937.88 per ounce, as of

0235 GMT. U.S. gold futures for December delivery

slipped 1.2% to $3,950.70 per ounce.

The dollar index fell 0.2% after hitting a two-week

high against its rivals in the previous session, making gold

less expensive for other currency holders.

"There's no catalyst for the rally other than a bit of a

technical bounce. A lot has gone against gold this week. The

looming U.S.-China trade deal diminishes trade and geopolitics

as a tailwind," said Capital.com analyst Kyle Rodda.

"The hawkish cut from the Federal Reserve and the drop in

the odds for another rate cut in December are also negative for

gold. I think gold could keep pulling back given this dynamic.

Although, in the long run the trend is to the upside for gold."

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.

Market focus is now on Trump's meeting with Xi in South

Korea. 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 the

summit with China's Xi.

Elsewhere, spot silver was steady at $47.51 per

ounce, platinum rose 0.3% to $1,590.21 and palladium

climbed 1.2% to $1,417.80.

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu

Sahu)