Spot gold was up 0.3% at $3,964.39 per ounce, after rising 2% earlier in the session

Gold prices pared gains on Wednesday as markets digested comments from U.S. Federal Reserve Chair Jerome Powell regarding the future policy path, despite the central bank cutting interest rates by a widely expected quarter percentage point.

Spot gold was up 0.3% at $3,964.39 per ounce, as of 1910 GMT, after rising 2% earlier in the session.

The U.S. central bank lowered the overnight benchmark rate to a target range of 3.75%–4.00%, the second time the bank eased this year.

Speaking at a press conference, Powell offered a note of caution about what lies ahead.

In the committee’s discussions at this meeting, there were strongly differing views about how to proceed in December, Powell said, adding, a further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it, policy is not on a preset course.

Gold had a logical reaction to Powell trying to walk back expectations for a December cut. We’re already seeing Fed funds futures trimming expectations, that would be dollar positive and gold negative, said Peter Grant, vice president and senior metals strategist at Zaner Metals.

The dollar index extended gains, making dollar-priced bullion more expensive for overseas buyers.

The fact that a December cut is now in question will blunt the precious metals bounce, said Tai Wong, an independent metals trader.

On the trade front, U.S.’ Donald Trump announced a trade deal with South Korea and expressed optimism about a similar truce with China’s President Xi Jinping, ahead of talks scheduled for Thursday.

Gold has gained 51% year-to-date, and hit a record high of $4,381.21 on October 20, but has dropped over 3% so far this week, in part due to easing trade tensions.