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Home Gold News Gold retreats on dollar uptick, traders bet on Fed pause

Gold retreats on dollar uptick, traders bet on Fed pause

by anna

Spot gold fell 0.1% to $1,977.29 per ounce by 0701 GMT, after hitting its highest since May 24 at $1,984.19 on Tuesday.

U.S. gold futures were little changed at $1,981.00.

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The dollar index was 0.2% higher after hitting a more than one-year low on Tuesday, making the greenback-priced gold more expensive for holders of other currencies. [USD/]

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While a 25 basis-point rate hike at the Fed’s July 26 meeting is largely expected, the U.S. central bank is “expected to retain its hawkish tone, which could pose a challenge to gold’s upside,” said Yeap Jun Rong, a market strategist at IG.

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Economists polled by Reuters expect the likely July rate hike to be the Fed’s last increase in the current tightening cycle.

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

“It boils down to what the Fed does at its meeting in July – the commentary will be very important regarding whether there has been any change in the Fed’s views from its last meeting,” Harshal Barot, a senior consultant at Metals Focus, said.

Stock markets were mixed with growth concerns dragging down China while elsewhere futures rose after British inflation came in surprisingly soft. [MKTS/GLOB]

Investors will also keep an eye out for initial jobless claims data on Thursday for the week of July 15, forecasted to rise to 242,000 from a seasonally adjusted 237,000 in the week ended July 8.

Among other metals, spot silver fell 0.3% to $25.02 per ounce, while platinum was down 0.1% to $982.24.

Palladium dipped 0.8% to $1,309.79 after rising to its highest since June 26 at $1,325 on Tuesday.

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