Mubasher: Gold prices were mixed on Thursday, following a sharp dive in the preceding session.

The dearth of clarity over the future course the Federal Reserve’s monetary policy stoked caution among investors, according to Reuters.

By 9:40 am GMT, US gold futures dropped by 0.76% to $1,504.30 per ounce, while spot gold rose by 0.20% to $1,497.01 per ounce, having dropped as much as 1% on Wednesday.

In a 7-3 vote, the Fed slashed its benchmark interest rates for the second time this year, while it pointed to a still “strong” labour market, signalling the unlikelihood of further rate cuts.

Although the reduction was widely expected, the division vote raised worries about the monetary policy outlook.

“Traders are disappointed by the divergence of future rate cut path and the market is unwinding expectations of a few more cuts in the months to come,” CMC Markets analyst Margaret Yang Yan was quoted by Reuters.

The pressure has become growingly higher on the world’s major central banks to loosen their monetary policy to shore up ailing economies as the trade conflict between the US and China dampens global growth.

“If the Fed is right to proceed with caution – meaning the global environment is not as dire as stimulus-hungry markets seem to envision – that implies less scope for overall easing,” DailyFx senior currency strategist Ilya Spivak was quoted by Reuters.

The Bank of Japan (BoJ), meanwhile, maintained its monetary policy, but it hinted that it would re-assess economic and price developments more closely at the next policy meeting on 30 and 31 October, against a backdrop of heightened risks to the world’s third biggest economy’s vulnerable recovery.