GOLD prices steadied on Wednesday (Jun 14) as the dollar eased, while traders assessed US inflation data and its bearing on the Federal Reserve’s much-awaited policy decision due later in the day.
Spot gold was up 0.1 per cent at US$1,945.29 per ounce by 0037 GMT after falling in the previous session. US gold futures were flat at US$1,958.30.
The US dollar eased slightly, making greenback-priced bullion more appealing to overseas buyers.
The annual increase in the consumer price index was the smallest in more than two years, though underlying price pressures are still strong, suggesting inflation will not easily cool and might keep fuel possibilities of a Fed rate hike.
Expectations the Fed will keep its target rate unchanged on Wednesday in a range of 5 per cent to 5.25 per cent are currently at 94.2 per cent, according to CME’s Fedwatch tool.
Federal Reserve officials sat down on Tuesday for their first meeting in 15 months with no pre-determined interest rate hike on the table in what amounts to the debut gathering of the “will-they-or-won’t-they” era.
While gold is seen as a hedge against inflation, higher rates to tame price pressures generally weigh on the non-yielding asset’s appeal.
Asian markets are set for an explosive open after a below-consensus reading of headline US inflation lit the touchpaper for a rally across all risky assets on Tuesday, although investors will be mindful of the steep rise in the US bond yields.
Global fund managers, meanwhile, cut their equity allocations to a five-month low, while cash levels dropped to 5.1 per cent, their lowest since January 2022, a Bank of America survey showed on Tuesday.
Spot silver held steady at US$23.6921 per ounce, platinum rose 0.3 per cent to US$979.64, while palladium was flat at US$1,361.55. REUTERS
