Tags
Gold was little changed on Wednesday in the wake of minutes from the latest U.S. Federal Reserve meeting, but the precious metal was trading above the two-week low hit in the last session as stock markets slid on fresh trade tensions.
Spot gold was steady at $1,273.68 per ounce, having fallen to its lowest level since May 3 on Tuesday at $1,268.97.
U.S. gold futures settled 0.1% higher at $1,274.20.
The minutes from U.S. Fed’s last meeting showed policymakers agreed that their current patient approach to setting monetary policy could remain in place “for some time.”
“Not many surprises here and not many were expected. I would note though that this Fed meeting happened before China backtracked on the trade talks. At the next meeting, almost certainly there will be more caution,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
Kitco – Gold prices have pushed into positive territory after inflation pressures have officially hit the Federal Reserve’s target.
While analysts continue to wait for the ever-elusive short squeeze to breathe new life in the yellow metal, the market’s speculative short side continues to expand hitting new historical record on a weekly basis. Net speculative short positions have increased for seven consecutive weeks.
By Apeksha Nair
BENGALURU, July 13 (Reuters) - Gold prices were muted on
Friday, stuck in a tight trading range, as the dollar extended
rally from the previous session when strong U.S. inflation data
and trade war concerns boosted demand for the greenback.
Spot gold was down 0.1 percent at $1,245.54 an ounce,
as of 0652 GMT. For the week, the metal was down 0.7 percent.
U.S. gold futures for August delivery slipped 0.1
percent to $1,245.50 an ounce.
"The dollar has been a prime mover of gold prices...Market
sentiments have been largely positive on the greenback as
investors pivoted from the safe haven asset despite rising
geopolitical risks," said Benjamin Lu, a commodities analyst at
Singapore-based broker Phillip Futures, in a note.
The dollar was buoyant near a 10-day peak versus a basket of
currencies on Friday, supported by Treasury yields that edged
higher on expectations the U.S. inflation rate will rise.
U.S. consumer price data on Thursday showed a steady buildup
of inflation that could keep the Federal Reserve on a path of
gradual interest rate increases.
A stronger dollar and higher U.S. rates reduce demand for
non-interest bearing gold as the metal becomes more expensive
for holders of other currencies.
Elsewhere, the European Central Bank will keep rates at a
record low for as long as needed to raise inflation, minutes of
the bank's latest meeting showed.
Meanwhile, Most Asian share markets rose on Friday, but
China's markets wobbled as investors braced for the impact of
broadening, tit-for-tat Chinese-U.S tariffs.
The United States and China could reopen talks on trade but
only if Beijing is willing to make significant changes, U.S.
Treasury Secretary Steven Mnuchin said on Thursday.
"The trade war issue is still creating a lot of uncertainty.
If the situation continues and we're not seeing any real
movements in gold prices because of it, we might see prices
actually move lower," said Cameron Alexander, an analyst with
Thomson Reuters-owned metals consultancy GFMS.