GOLD prices were flat on Wednesday (Jun 7) as cautious traders awaited the US Federal Reserve’s interest rate decision at its policy meeting next week, although a softer dollar kept the bullion supported.
Spot gold was little changed at US$1,963.83 per ounce by 0027 GMT. US gold futures were listless at US$1,980.20.
The dollar index eased slightly, making gold less expensive for overseas buyers.
Supply gain pressures continued to abate in May, the New York Fed said in a report on Tuesday, further reducing what had been one of the key forces driving up inflation pressures around the world.
World shares edged higher on Tuesday as investors mulled whether a recent rally in stocks has legs to run further, while Treasury yields drifted higher as traders pared bets that US rate cuts are on the horizon given sticky price pressures.
The US consumer price report for May on Jun 13, ahead of the Fed’s much awaited meeting, will provide investors more clarity on the health of the economy following recent economic data and dovish remarks from Fed officials.
Fed fund futures indicate traders have priced in a 80.6 per cent chance that the Fed will hold interest rates in the 5-5.25 per cent range, according to CMEGroup’s Fedwatch tool. However, they see 51 per cent odds of another 25-basis-point rate hike in July.
Non-interest-bearing bullion tends to become less attractive in a high interest rate environment.
SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.15 per cent to 938.11 tonnes on Tuesday from 939.56 tonnes on Monday.
Spot silver rose 0.1 per cent to US$23.6131 per ounce, platinum added 0.3 per cent to US$1,034.55, and palladium gained 0.4 per cent to US$1,419.07. REUTERS
