GOLD prices edged higher on Thursday (Jun 8) following a 1 per cent drop in the previous session, while investors cautiously awaited the upcoming Federal Reserve policy meeting after the Bank of Canada raised rates to a 22-year high.
Spot gold was up 0.3 per cent at US$1,945.60 per ounce by 0034 GM. US gold futures held steady at US$1,960.10.
The Bank of Canada on Wednesday hiked its overnight rate to a 22-year high of 4.75 per cent, and markets and analysts immediately forecast yet another increase next month to ratchet down an overheating economy and stubbornly high inflation.
The US economy is strong amid robust consumer spending but some areas are slowing down, US Treasury Secretary Janet Yellen said, adding that she expects continued progress in bringing inflation down over the next two years.
The US consumer inflation report for May, due on Jun 13, ahead of the Fed meeting, will provide investors with more clarity about the health of the world’s largest economy.
Higher interest rates dull the appeal for zero-yield bullion.、
The Fed will not raise interest rates for the first time in more than a year at its Jun 13-14 meeting, according to economists polled by Reuters.
Another Reuters poll suggested, the dollar’s renewed strength against most major currencies will not fade away anytime soon, according to FX strategists, who said it would take rate cuts from the Fed to weaken the currency substantially.
SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.37 per cent to 934.65 tonnes on Wednesday from 938.11 tonnes on Tuesday.
Spot silver was up 0.1 per cent at US$23.4794 per ounce, platinum rose 0.3 per cent to US$1,021.84, and palladium advanced 0.5 per cent to US$1,395.67. REUTERS
