Gold ticks lower on firmer dollar, central bank meetings in focus

GOLD prices edged lower in early Asian trade on Monday (Jun 12) as the dollar held firm and investors positioned for a series of major central bank policy meetings this week, with a likely pause in interest rate hikes by the US Federal Reserve.

Spot gold was down 0.1 per cent to US$1,957.92 per ounce by 0033 GMT. US gold futures fell 0.2 per cent to US$1,972.60.

Gold prices climbed 0.7 per cent for the week ended on Friday, helped by a more than 1 per cent jump on Thursday after a surge in US weekly jobless claims.

Focus now turns to the release of US consumer price index (CPI) and producer price index (PPI) data on Tuesday and Wednesday, respectively.

Fed fund futures show a 71.2 per cent probability that the US central bank will keep its benchmark overnight interest rate in the 5.00-5.25 per cent range when its two-day meeting ends on Wednesday.

Safe-haven gold tends to gain during times of uncertainty, while lower rates also lift the appeal of the zero-yield asset.

At a two-day policy meeting ending on Jun 16, the Bank of Japan is expected to maintain ultra-loose monetary policy and its forecast for a moderate economic recovery, as robust corporate and household spending cushion the blow from slowing overseas demand, sources said.

Physical gold demand slowed in China and India last week, forcing dealers to offer discounts, with volatile prices in India prompting buyers to delay purchases.

SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.31 per cent to 931.76 tonnes on Friday from 934.65 tonnes on Thursday.

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Gold prices edge higher as markets await US Fed cues

Spot silver was down 0.2 per cent to US$24.2274 per ounce, platinum shed 0.3 per cent to US$1,005.49.

Palladium was flat at US$1,322.88 after shedding more than 4 per cent on Friday. REUTERS