Gold eases as dollar gains ahead of Fed meeting minutes

 Gold eases as dollar gains ahead of Fed meeting minutes

By Renita D. Young and Zandi Shabalala

NEW YORK/LONDON (Reuters) - Gold fell on Wednesday as the U.S. dollar rose against a basket of currencies while investors awaited minutes from the U.S. Federal Reserve's latest policy meeting for clues on the pace of interest rate hikes.

Spot gold lost 0.1 percent at $1,289.89 per ounce by 1:34 p.m. EDT (1734 GMT), after touching its highest since May 15 at $1,297.84. U.S. gold futures for June delivery settled down $2.40, or 0.2 percent, at $1,289.60 per ounce.

The dollar, in which gold and other commodities are priced, rose versus a basket of currencies before the 2 p.m. EDT (1800 GMT) release of the Fed meeting's minutes.

"We're down on the stronger dollar," said Bob Haberkorn, senior market strategist at RJO Futures. "The market's waiting to see what the language is ... but expecting a confirmation of the rate hike in June."

At its previous meeting in May, the U.S. central bank expressed confidence in the economy and global growth, and kept its benchmark lending rate unchanged. It said inflation was near the bank's target, leaving it on track to raise borrowing costs in June.

Gold is highly sensitive to rising U.S. rates, as these tend to boost the dollar and make bullion, a non-interest-bearing asset, less attractive to investors.

"Any strong data that confirms a trend of global growth at the very least maintaining and we will continue to see gold prices suffer," said Tyler Ritchey, analyst at the Sevens Report.

Often used to store wealth in times of political or economic uncertainty, gold was underpinned by safe-haven support after U.S. President Donald Trump said he was not pleased about recent talks with China.

Trump also cited a "substantial chance" his summit with North Korean leader Kim Jong Un will not take place as planned on June 12 amid concerns that Kim is resistant to giving up his nuclear weapons.

Prices remained in a narrow range, just below $1,300 per ounce, as investors awaited more clues on the path of U.S. interest rates.

Gold has shown reduced volatility in the last few trading sessions as it attempted a break above $1,300 and prices are "waiting for a new, clear direction," said ActivTrades chief analyst Carlo Alberto De Casa.

Silver fell 0.8 percent to $16.39 an ounce and platinum was 0.4 percent lower at $899.40 an ounce.

Palladium eased 1.7 percent to $973.22 an ounce.

(Additional reporting by Karen Rodrigues in Bengaluru; Editing by Dale Hudson, Edmund Blair and Richard Chang)

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

Your guide to the latest cricket World Cup stories, analysis, reports, opinions, live updates and scores on Follow us on Twitter and Instagram or like our Facebook page for updates throughout the ongoing event in England and Wales.

Updated Date: May 24, 2018 00:05:27 IST