Gold steadies on the face of awaited FOMC statement

By Karthika Suresh Namboothiri and Diptendu Lahiri (Reuters) - Gold prices steadied on Wednesday as investors awaited the U.S.

Reuters June 20, 2019 00:05:58 IST
Gold steadies on the face of awaited FOMC statement

Gold steadies on the face of awaited FOMC statement

By Karthika Suresh Namboothiri and Diptendu Lahiri

(Reuters) - Gold prices steadied on Wednesday as investors awaited the U.S. Federal Reserve's statement later in the session for cues on its interest rate outlook.

Spot gold was little changed at $1,346.03 per ounce at 12:57 p.m. EDT (1657 GMT). U.S. gold futures fell 0.1% to $1,349.70 per ounce.

"The market might become a little cautious just ahead of the meeting and gold investors might take a neutral position then," said Suki Cooper, precious metals analyst at Standard Chartered Bank.

The Fed monetary policy statement scheduled for release at 2 p.m. EDT (1800 GMT) will be followed by a news conference by Chairman Jerome Powell. Futures markets have almost fully priced in a quarter-point easing in July and imply more than 60 basis points of cuts by Christmas.

"People are optimistic about Fed cutting rates twice, once in July and once in December," Cooper said.

Gold touched a 14-month peak of $1,358.04 an ounce on Friday, and has gained more than 6% since touching a 2019 low of $1,265.85 in early May.

"A major driver of the gold price rally since 4Q18 has been the Fed's pivot from expecting rate hikes to expecting cuts. ... We expect market participants to be disappointed by the Fed's press conference on Wednesday. This would pressure gold prices," Societe Generale said in a note.

The U.S. central bank is not alone in contemplating rate cuts. European Central Bank President Mario Draghi hinted on Tuesday that if inflation failed to pick up, more policy easing could be on its way.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Also weighing on prices was fresh optimism on the U.S.-China trade war front. China said earlier in the session that positive outcomes were possible in trade negotiations with Washington, after the presidents of the world's two largest economies agreed to revive their troubled talks at a G20 meeting later this month.

The drawn-out trade tussle between the world's two biggest economies has toppled global markets since its inception and raised concerns of an economic recession.

"We think the recent rally in gold rally has been as a result of combination of two things, the trade issues and central banks cutting rates. I don’t think these two have factored in completely yet," Cooper added.

Amongst other precious metals, silver was down 0.2% to $14.97, while platinum was unchanged at $806.93.

Palladium gained 1.3% to $1,499.35 per ounce, having hit its highest since March 27 at $1,502.02 earlier in the session.

(Reporting by Karthika Suresh Namboothiri and Diptendu Lahiri in Bengaluru; editing by Jonathan Oatis)

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

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

India considers emergency authorisation of vaccine as COVID-19 cases surge
World

India considers emergency authorisation of vaccine as COVID-19 cases surge

By Rajendra Jadhav MUMBAI (Reuters) - India said on Sunday it was considering granting an emergency authorisation for a COVID-19 vaccine, particularly for the elderly and people in high-risk workplaces, as the country's number of reported infections passed 4.75 million. India, which has consistently reported over 1,000 COVID-19 deaths daily this month, has now recorded 78,586 fatalities from the disease. It lags only the United States globally in overall number of infections, but it has been adding more daily cases than the United States since mid-August

Would-be Merkel successor Laschet loses ground in local election win
World

Would-be Merkel successor Laschet loses ground in local election win

BERLIN (Reuters) - Germany's Christian Democrats were set for an election win in the western state of North Rhine-Westphalia on Sunday, an exit poll showed, but their share of the vote shrank, denting state premier Armin Laschet's ambitions to succeed Chancellor Angela Merkel. Laschet, who is positioning himself as the continuity candidate to succeed Merkel, had hoped to increase the Christian Democrats' share of the vote in the local elections to boost his standing ahead of a December party leadership showdown

Peru bid to oust president loses steam as opposition splits
World

Peru bid to oust president loses steam as opposition splits

By Marco Aquino LIMA (Reuters) - A bid by the opposition-led Congress to remove Peruvian President Martín Vizcarra appeared to falter on Sunday, after key political leaders rejected the ouster over fears the upheaval would plunge the country into a political crisis. César Acuña, head of the second-largest party in Congress and a possible candidate in 2021 presidential elections, said an ouster would "aggravate" the country's current situation, already fragile from the impact of the coronavirus crisis. Acuña's party had given key votes last Friday to start impeachment proceedings against Vizcarra over leaked audio tapes some lawmakers said showed the president trying to downplay ties to a singer being probed over government contracts