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Gold stays steady ahead of expected Fed rate cut
GOLD traded steady on Tuesday as most traders stayed on the sidelines ahead of a widely expected rate cut by the US Federal Reserve later this week.
Spot gold was little changed at US$1,498.80 per ounce, as of 0535 GMT, after rising as much as 1 per cent in the previous session on intensifying tensions in the Middle East.
US gold futures were down 0.4 per cent at US$1,505.6 per ounce.
"The market is searching for a new catalyst ... the 25 basis point rate cut is relatively priced in already, but what traders are really looking for is forward guidance," Phillip Futures analyst Benjamin Lu said.
A quarter-point rate cut is widely expected when the Fed issues its next policy statement on Wednesday, which would be the central bank's second such cut after lowering rates in July for the first time since 2008.
A press conference by Chair Jerome Powell is scheduled to follow the release of the central bank's statement.
The Fed's language and new economic projections will be watched amid a bruising US-China trade war, stimulus by the European Central Bank, and a stream of weak manufacturing data that may hint at larger problems for the United States.
"If the Fed goes against market expectations, there is a strong possibility that we may see a short-term reversal (in gold prices) and a quick sharp test towards US$1,455," Lu said.
"It appears conviction remains positive so long as gold hangs around US$1,500," Stephen Innes, Asia Pacific market strategist at AxiTrader, said in a note.
On the technical front, spot gold looked neutral in a range of US$1,488-US$1,523.61 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao. REUTERS