GOLD prices were little changed on Monday (Jun 19), as the dollar held firm and investors assessed the path ahead for interest rates after the US Federal Reserve’s hawkish tone.
Spot gold was flat at US$1,956.93 per ounce by 0042 GMT. US gold futures fell 0.1 per cent to US$1,969.20.
The dollar index held firm, making bullion less appealing for buyers holding other currencies.
Fed officials struck a hawkish tone in their first comments since the central bank held the policy interest rate steady at its meeting last week, but signalled that rate hikes would likely resume.
Inflation in key parts of the US service industry “remains elevated and has not shown signs of easing”, the Fed said in its latest monetary policy report to Congress.
Gold is considered a hedge against inflation, but interest rate hikes raise the opportunity cost of holding non-yielding bullion.
Traders are now pricing in an about 72 per cent chance of Fed rate hike in July, according to the CME Fedwatch tool.
Asian shares started cautiously after their best weekly run in five months, as investors looked ahead to China’s rate decision and Fed chair Jerome Powell’s testimonies for clues on the rate path ahead.
A few months ago, most investors feared having too much exposure to equities. Now many are worried that they might not have enough.
SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.47 per cent to 934.03 tonnes on Friday from 929.70 tonnes on Thursday.
US stock markets will be closed on Monday for the Juneteenth holiday.
Spot silver fell 0.3 per cent to US$24.0799 per ounce, platinum eased 0.3 per cent to US$978.63, and palladium ticked down 0.1 per cent to US$1,409.06.
