Gold trades narrow range as traders await US Fed decision
GOLD prices struggled for direction in early Asian trading on Wednesday (Jul 26) as traders awaited the US Federal Reserve’s widely expected rate hike and a potential end to its monetary tightening cycle.
Spot gold held its ground at US$1,964.14 per ounce by 0110 GMT, while US gold futures edged 0.1 per cent higher to US$1,965.90.
Market focus is on a series of central bank meetings this week, starting from the Fed policy decision on Wednesday, followed by the European Central Bank on Thursday and the Bank of Japan a day later.
Traders expect the US Fed to keep rates in the 5.25-5.5 per cent range until March 2024, according to the CME FedWatch tool.
Gold is highly sensitive to rising interest rates as they increase the opportunity cost of holding non-yielding bullion.
The US dollar and US Treasury yields held near their two-week highs from Tuesday, making zero-interest-bearing bullion more expensive for buyers holding other currencies and limiting gains.
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While US consumer confidence increased to a two-year high in July, they remained fearful of a recession over the next year following high interest rates.
The US Commerce Department is also expected to report new home sales likely fell to a seasonally adjusted annual rate of 725,000 units in June, from 763,000 units in the month before.
Meanwhile in China, net gold imports via Hong Kong fell by about 29 per cent to their lowest in five months in June, reflecting a sluggish economic recovery in the world’s top consumer of the metal.
Spot silver fell 0.3 per cent to US$24.61 per ounce, platinum rose 0.1 per cent to US$966.18 and palladium was up 0.3 per cent to US$1,287.86. REUTERS
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