* Trump seeks trade truce with Xi in South Korea talks * Fed cuts rates by a quarter of a percentage point * 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)
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