Gold steadies as traders look to Fed for interest-rate outlook

[SINGAPORE] Gold was little changed as traders awaited minutes from the US Federal Reserve’s last meeting for fresh insights into the path for US interest rates.

Bullion was near US$4,165 an ounce in early trading, after slipping 0.3 per cent in the previous session. The Fed will release details of its June meeting later this week, with bets on tighter monetary policy having eased following weaker-than-expected jobs data last week.

“On balance, the market is taking a slightly more cautious view about the prospect for US rate hikes,” said Rhona O’Connell, head of market analysis for EMEA and Asia at StoneX. “This has helped give hard assets some support.”

After climbing to a record in January, gold has come under pressure on speculation that the Fed might raise rates to tackle stubborn inflation, even as oil prices have eased following an interim peace deal between the US and Iran. Higher borrowing costs are typically a headwind for the precious metal, which does not pay interest.

Bullion is around a fifth lower than immediately prior to the war in the Middle East, although it’s fresh from its first weekly gain since May and bounced back above US$4,000 an ounce after dropping below the psychological threshold, as well as several key moving averages.

Light bargain-hunting has lifted gold back above the 10-day moving average, with technical indicators “suggesting some upside scope”, O’Connell said. “It has found some resistance at US$4,180 and is resting on technical support above US$4,130,” she added.

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Spot gold was little changed at US$4,164.38 an ounce at 7.18 am in Singapore. Silver was also flat at US$62.06 an ounce. Platinum and palladium edged higher. The Bloomberg Dollar Spot Index, a gauge of the US currency, was marginally down. BLOOMBERG