Gold holds steady amid caution ahead of US Fed minutes

GOLD held steady on Wednesday (Jul 5) ahead of the release of the US Federal Reserve’s latest monetary policy meeting minutes and other economic data, with a firmer dollar keeping prices in check.

Spot gold held steady at US$1,926.52 per ounce by 0034 GMT, while US gold futures rose 0.3 per cent to US$1,934.30.

The dollar index held firm, making bullion less attractive for overseas buyers.

Investors will look out for minutes of the Jun 13-14 FOMC meeting when the central bank held rates steady at 5-5.25 per cent and signalled the need to deliver at least two more quarter-point interest rate hikes before the end of the year.

High-interest rates discourage investing in non-yielding gold, which is otherwise seen as a safe investment amid economic uncertainties.

The world’s major central banks delivered the biggest number of monthly interest rate hikes year-to-date in June, surprising markets and flagging more tightening ahead as policymakers grapple to get the upper hand in the battle against inflation.

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The most important Asian economic indicator from a packed calendar on Wednesday will be China’s services purchasing managers index report for June, which comes amid the latest ratcheting up of US-Sino tensions.

Companies caught out by China’s decision to restrict exports of two metals widely used in semiconductors and electric vehicles were racing to secure supplies on Tuesday as some industry suppliers worried curbs on rare earth exports could follow.

Spot silver rose 0.2 per cent to US$22.9876 per ounce, platinum climbed 0.3 per cent to US$917.71 and palladium added 0.7 per cent to US$1,251.94. REUTERS