Gold slips as stocks rise ahead of Fed, BoJ meetings | Reuters - Firstpost
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Gold slips as stocks rise ahead of Fed, BoJ meetings | Reuters

  Updated: Jul 26, 2016 00:15 IST

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LONDON Gold fell on Monday as the dollar firmed and a recovery in risk appetite supported world stock markets near nine-month highs ahead of central bank meetings in the United States and Japan.

The world's major economies pledged at a G20 meeting this weekend, dominated by Britain's vote last month to leave the European Union, to use all policy tools available to boost growth. That lifted both shares and the dollar.

Spot gold was down 0.7 percent at $1,313.96 an ounce at 1400 GMT, while U.S. gold futures for August delivery were down $9.90 an ounce at $1,313.50.

Gold eased for a second week last week, by 1.2 percent, after rallying to its highest in more than two years in early July after the Brexit vote, which drove up demand for the metal as a haven from risk.

"It remains to be seen what the long-term impact of Brexit will be, but purely in the short term, there wasn't a meltdown in the UK which could have affected global growth or European figures," Natixis analyst Bernard Dahdah said.

"People are going to wait until August to see what these figures show. Even if they're bad, but less so than people expected, we could see prices of gold drop further."

Investors are anticipating a hectic week that includes a Federal Reserve meeting, European bank stress tests and what could be another super-sized slug of stimulus from Japan.

Speculators cut their record bullish bets on COMEX gold futures and options for a second straight week, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday. Even so, they remain highly elevated.

"In absolute terms net long positions are still at a very high level, meaning that there is further correction potential for the gold price from this side," Commerzbank said in a note.

"A massive overhang of bets on rising prices is also hanging over silver like the sword of Damocles," it added.

Silver, which fell about 3 percent last week, was down 1.1 percent at $19.37.

Platinum was 0.5 percent lower at $1,071.60 an ounce. Palladium, which hit a near nine-month high on Friday, was down 0.1 percent at $679.45.

It registered its fifth weekly gain last week, rising 5 percent as sharper appetite for risk helped the more industrial precious metal catch up with its peers, which it lagged in the weeks after the Brexit vote.

(Additional reporting By Nallur Sethuraman and Vijaykumar Vedala in Bengaluru, editing by William Hardy and Susan Thomas)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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