PRECIOUS-Gold perks up after Fed minutes but gains capped by trade optimism

Reuters

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    * Most Fed policymakers believed 25 bps cut needed- Sept.
minutes
    * U.S.-China trade talks set to start Thursday in Washington
    * Turkey launches military operation in northeast Syria

 (Updates prices, adds details)
    By Swati Verma
    Oct 9 (Reuters) - Gold eked out gains on bets of further
U.S. Federal Reserve rate cuts following the release of minutes
from the central bank's September policy meeting on Wednesday,
but hopes of a Sino-U.S. trade deal buoyed risk sentiment and
capped bullion's gains.
    Spot gold  XAU=  was up 0.2% at $1,507.52 per ounce by 02:10
p.m. EDT (1810 GMT). U.S. gold futures  GCcv1  settled up 0.6%
at $1,512.80 an ounce.
    "The fact is that the Fed is adding a significant amount of
liquidity to the market and they are increasing the money supply
and that in my opinion is why gold is firmer today," said David
Meger, director of metals trading at High Ridge Futures.
    Fed Chairman Jerome Powell on Tuesday flagged openness to
further rate cuts to fend off global economic risks and said the
Fed would "soon announce measures to add to the supply of
reserves over time."  urn:newsml:reuters.com:*:nL2N26T1FK
    The minutes showed most Fed policymakers supported the need
for an interest rate cut in September.  urn:newsml:reuters.com:*:nFOM9LEF6J
    Capping bullion's gains, stocks rose as media reports raised
hopes of progress in trade talks between the United States and
China.  MKTS/GLOB 
    High-level talks involving Chinese Vice Premier Liu He, U.S.
Trade Representative Robert Lighthizer and Treasury Secretary
Steven Mnuchin are planned for Thursday and Friday.  urn:newsml:reuters.com:*:nL2N26T0K3
    "We do have some light optimism on the trade front. However,
when everybody steps away, they realise that the real chances of
a trade deal, even partial, are small at best," High Ridge
Futures' Meger said.
    A Bloomberg report on Wednesday said China was still open to
agreeing to a partial trade deal with the United States, citing
an official with direct knowledge of the talks.  urn:newsml:reuters.com:*:nFWN26T0UF
    On the Brexit front, EU officials denied on Wednesday that
Brussels was preparing a major concession to Britain to secure a
deal.  urn:newsml:reuters.com:*:nL5N26U2KR
    Also on the radar were other major geopolitical
developments, with Turkey launching a military operation against
Kurdish fighters in northeast Syria on Wednesday.  urn:newsml:reuters.com:*:nL5N26U431
    "There are lingering geopolitical matters that have many
traders and investors looking to the safe-haven metals as an
investment," Jim Wyckoff, senior analyst with Kitco Metals,
wrote in a note.
    Silver  XAG=  was up 0.3% at $17.77 an ounce, while platinum
 XPT=  rose 0.2% to $891.73. 
    Palladium  XPD=  gained 0.3% to $1,680 an ounce. Prices had
risen to $1,691.34 an ounce earlier, hovering just below last
week's record peak.
    "Palladium is likely to stay in a wide deficit. Likely firm
demand from the automotive sector will help keep the market
tight," James Steel, chief precious metals analyst at HSBC wrote
in a note.  urn:newsml:reuters.com:*:nFWN26U06Y

 (Reporting by Swati Verma in Bengaluru
Editing by Matthew Lewis, Tom Brown, Kirsten Donovan)
 ((Swati.Verma@thomsonreuters.com;  within U.S. +1 646 223 8780
, outside U.S. +91 80 6749 6356/1298 ; Reuters Messaging:
swati.verma.thomsonreuters.com@reuters.net))

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