Gold was little changed on Thursday as investors waited to see if the United States would slap fresh tariffs on Chinese goods this weekend, while palladium continued its record run on fears of a deepening supply deficit.
Spot gold was flat at $1,474.71 per ounce, as of 0453 GMT. U.S. gold futures were up 0.3 percent at $1,479 per ounce.
“The key issue for many markets in the near-term is the trade negotiations between China and the U.S. Both Beijing and Washington have indicated the worst-case scenario is the tariffs would be delayed,” said Michael McCarthy, chief market strategist at CMC Markets.
“If we saw tariffs introduced on Sunday, that would be a real positive for gold,” he added.
The bullion is often seen as an alternative investment during times of political and financial uncertainty.
U.S. President Donald Trump is expected to meet with top advisers on Thursday about planned December 15 tariffs on nearly $160 billion in Chinese consumer goods, three sources familiar with the plans said.
In the previous session, bullion rose as much as 1 percent to its highest since December 5 after the U.S. central bank kept benchmark interest rates unchanged and signaled borrowing costs will not change anytime soon.
Higher U.S. interest rates weigh on non-yielding bullion by increasing its opportunity cost and also support the dollar.
The U.S. dollar index fell to its lowest since early August after Fed dashed hopes of rate hikes any time soon.
“The Fed reiterating its accommodative stance lent itself the idea that there wont be any pressure from declining money supply or lifting of rates,” McCarthy said.
“With the Fed possibly expanding the balance sheet again in 2020 … gold should be a regular feature in one’s asset allocation during periods of market uncertainty, especially when interest rates are low,” AxiTrader market strategist Stephen Innes said in a note.
Investors were also focused on UK election that will pave the way for Brexit and Christine Lagarde’s first meeting of the European Central Bank later in the day.
Elsewhere, palladium was up 0.1 percent at $1,911.84 an ounce. Plagued by supply deficit, the auto catalyst metal notched an all-time high of $1,918.50 earlier in the session.
The metal surpassed $1,900 for the first time ever on Tuesday as mines across South Africa shut down after flash flooding triggered the most severe power blackouts in more than a decade, threatening a key export sector.
Platinum slipped 0.2 percent to $936.60 per ounce, while silver was up 0.2 percent at $16.89 per ounce.