Gold flat as investors await clarity on Fed policy

GOLD prices were little changed on Tuesday (Apr 18) as investors sought clarity on whether the US Federal Reserve would pause after a widely expected interest rate hike in May.

Spot gold was flat at US$1,994.85 per ounce, as of 0027 GMT. US gold futures were also unchanged at US$2,006.50.

Gold prices fell to their lowest in nearly two weeks on Monday after data showing manufacturing activity in New York state increasing for the first time in five months fuelled bets of a 25-basis-point rate hike by the Fed at its May meeting, and boosted US Treasury yields and the dollar.

The CME FedWatch tool shows markets are pricing in a 91 per cent chance of a 25 basis-point hike in May.

Other data on Monday showed confidence among US single-family homebuilders improved for a fourth straight month in April.

Investors will keep a close eye on comments from Fed officials this week before they enter into a blackout period from Apr 22 ahead of the Fed’s May 2-3 meeting.

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Gold edges down on rate-hike bets, firmer dollar

Gold is considered a hedge against inflation and economic uncertainties, but higher interest rates dim non-yielding bullion’s appeal.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.22 per cent to 925.70 tonnes on Monday from 927.72 tonnes on Friday.

Spot silver dipped 0.4 per cent to US$25.01 per ounce, platinum edged up 0.1 per cent to US$1,049.13 and palladium was up 0.1 per cent at US$1,561.36. REUTERS