Gold recovers from one-month low on short-covering
Federal Reserve cuts interest rates by 25 basis points
Gold hit lowest since Nov. 18 earlier in the session
Fed policymakers want to see more progress in bringing inflation down - Jerome Powell
Adds comments in paragraphs 3 and 4, updates with mid-session trading
By Rahul Paswan
Dec 19 (Reuters) -Gold prices jumped more than 1% on Thursday on short-covering after dipping to the lowest in a month earlier in the session, while the market awaited key U.S. data for further cues on the Federal Reserve's policy trajectory.
Spot gold XAU= gained 0.8% to$2,607.88 per ounce as of 0251 GMT. However, U.S. gold futures GCv1 eased 1.2% to $2,620.60.
"Very short-term oriented speculators are looking for opportunities to buy the dips and gold's gain is because of short-covering after the metal touched the psychologicallevel of$2,600 yesterday," said Kelvin Wong, OANDA's senior market analyst for Asia Pacific.
"If the U.S. Personal Consumption Expenditures (PCE)data comes in line with expectations that shouldn't be a big surprise. But in case it inches up to 3% and above, we could see some pressure on gold again."
Traders are now watching out for key U.S. GDP, initial jobless claims data laterin the day and core PCE datalater this week for further insights into the Fed's 2025 rate cut path.
The bullion declined more than 2% to its lowest since Nov. 18 after the Fed lowered rates by 25 basis points asexpected but indicated it will make fewer rate cuts by the end of 2025.
Fed Chair Jerome Powell said that the central bank's policymakerswant to see more progress in bringing inflation down as they consider the path of future rate cuts as inflation has exceeded year-end projections.
Markets now expect the Fed to leave its benchmark overnight rate unchanged at the Jan. 28-29 meeting.
Higher rates reduce the appeal of holding the non-yielding asset.
Spot silver XAG= was up 0.3% to $29.44 per ounce, platinum XPT= added 0.6% to $924.65 and palladium XPD= gained 1% to $912.70.
Reporting by Brijesh Patel and Rahul Paswan in Bengaluru; Editing by Alan Barona and Sumana Nandy
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