PRECIOUS-Gold inches up on Fed rate cut cheer, sombre dollar

Oct 31 (Reuters) - Gold prices edged higher on Thursday after the U.S. Federal Reserve cut interest rates as expected, even as the central bank dropped a previous reference in its statement that signalled future rate cuts.


* Spot gold rose 0.3% to $1,499.06 per ounce as of 0137 GMT. U.S. gold futures inched 0.3% higher to $1,501.40 per ounce.

* The U.S. central bank on Wednesday cut interest rates for the third time this year to help sustain U.S. growth despite a slowdown in other parts of the world, but signalled there would be no further reductions unless the economy takes a turn for the worse.

* Gold prices gained modestly after the statement, but turned negative soon after Fed Chair Jerome Powell said in a news conference that the U.S. economy was doing well, and likely to continue to do so under the current stance of monetary policy.

* Asian shares cheered the rate cut and U.S. stock futures edged higher with MSCI’s broadest index of Asia-Pacific shares outside Japan gaining 0.2%.

* Investors now shift focus to Japan where its central bank may trim its consumer price forecasts, but leave policy unchanged due to hopes that progress in scaling back a U.S.-China trade dispute will give it room to save its dwindling policy tools.

* A more than 15-month trade spat between China and the United States has roiled financial markets and stirred global recessionary fears.

* The dollar index against a basket of six major currencies dipped 0.2% to 97.427, extending declines from Wednesday. A lower U.S. currency makes dollar denominated metals cheaper for holders of other currencies, which could help boost their demand.

* Elsewhere, gold consumption in China, the world’s top producer and consumer of the precious metal, fell 9.58% year-on-year to 768.31 tonnes in the first nine months of 2019, China Gold Association said on Wednesday.

DATA/EVENTS 0030 Australia Building Approvals Sept 0100 China NBS Manufacturing PMI Oct 0745 France CPI EU Norm Prelim YY Oct 1000 EU HICP Flash YY Oct 1000 EU HICP-X F&E Flash YY Oct 1000 EU GDP Flash Prelim YY, QQ Q3 1000 EU Unemployment Rate Sept 1230 US Consumption Adjusted MM Sept 1230 US Initial Jobless Claims Weekly Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing by Shounak Dasgupta