Gold prices rose in Thursday's Asian session after a warning about the economy from the Federal Reserve pushed traders toward safe-haven assets, although speculation about a U.S. trade agreement capped gains in the metal.
U.S. President Donald Trump said he would announce a major trade agreement on Thursday, triggering some risk appetite movements in the markets. However, a report suggested that the agreement could be with the United Kingdom, which would likely limit the economic implications of the deal.
Gold plunged sharply on Wednesday after the U.S. and China confirmed that trade talks would take place this week. However, a trade agreement stemming from these discussions seemed unlikely, especially as both Washington and Beijing showed few signs of backing down in their bitter tariff exchange.
Spot gold rose 0.8% to $3,389.0 an ounce, while June gold futures increased 0.1% to $3,394.99/oz at 04:36 Spain time.
The Fed's economic warning boosts gold demand.
Gold benefited from renewed flows into safe-haven assets after the Fed kept interest rates unchanged as widely expected on Wednesday.
But the central bank also indicated a primarily wait-and-see approach regarding possible rate cuts, citing greater uncertainty over trade and the economy stemming from Trump's tariffs.
