Nov 7 (Reuters) - Gold prices rose more than 1% on Thursday, helped by a retreat in the U.S. dollar, while the Federal Reserve cut interest rates by a quarter of a percentage point as widely expected.
Spot gold was up 1.2% at $2,691.36 per ounce as of 2:22 p.m. EST (1919 GMT), after dropping to a three-week low on Wednesday. U.S. gold futures settled 1.1% higher at $2,705.80.
At the end of a two-day policy meeting, the U.S. central bank lowered the benchmark overnight interest rate to the 4.50%-4.75% range, with policymakers taking note of a job market that has "generally eased".
Lower U.S. interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion.
"Gold remains in a strong bull market and no event this week, from the election to today's Fed decision, is likely to change that," said Tai Wong, an independent metals trader.
"Unless Powell leans towards a pause today, gold is likely to take back yesterday's knee-jerk losses," Wong added.
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The dollar index (.DXY), opens new tab was down 0.6% against its rivals after rising to a four-month high after Republican former President Donald Trump's win in Tuesday's presidential election.
Traders are currently pricing in another 25 basis point cut by the Fed in December, according to LSEG data.
Investors now look forward to comments from Fed Chair Jerome Powell's press conference due at 2:30 p.m. ET for more cues on monetary policy path.
With Trump's impending return to power, "any future rate reductions could well be more difficult to achieve due to concerns that higher prices and stickier inflation force central banks to keep policy restrictive for longer than they would like," independent analyst Michael Hewson wrote in a note.
Elsewhere, spot silver rose 1.8% to $31.71 per ounce, platinum gained 0.6% to $992.65 and palladium shed 1.3% to $1,021.25.
Reporting by Brijesh Patel, Sherin Elizabeth Varghese and Anjana Anil in Bengaluru; Editing by Paul Simao, Susan Fenton, Vijay Kishore and Mohammed Safi Shamsi
