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Weak dollar underpins gold as market awaits Fed

Reuters  |  LONDON 

By Zandi Shabalala

(Reuters) - Gold edged up on Wednesday on a weaker dollar and uncertainty over the outcome of Dutch elections, although losses were slight as the market awaited clues from the Federal Reserve on the outlook.

With an immediate U.S. rate increase seen as a done deal, investors are focusing on what message the central bank will deliver when it concludes a two-day meeting on Wednesday. In December, the Fed forecast three rate rises this year.

Spot gold was up 0.2 percent at $1,201 an ounce at 1553 GMT, while U.S. gold futures were 0.15 percent higher at $1,200.90 per ounce.

"The market is in wait and see mode for this afternoon when we hear what the Fed will do this year," Mitsubishi analyst Jonathan Butler said.

"The increase is largely in the price. The really interesting thing will be how hawkish the Fed sounds when they give the forecast of rate rises for the year," he said.

Gold is highly exposed to interest rates, as rising rates lift the opportunity cost of holding non-yielding bullion.

The statement from the Fed, due at 1800 GMT on Wednesday, will be followed by a briefing at 1830 GMT. [FED/DIARY]

The dollar was down 0.2 percent against a basket of major currencies ahead of the Fed statement, helping lift gold which is denominated in dollars and so became cheaper for holders of other currencies.

Investors were also focusing on Wednesday's elections in the Netherlands, which have been boosting gold's safe-haven appeal.

The Party for Freedom, which wants to "de-Islamicise" the country, is seen as having little chance of coming to power, but a strong performance could fuel worries about a surprise result in in April and May.

"There is a risk that the far-right candidate may have an influence election and there is some hedging in gold ahead of that," Mitsubishi's Butler said, adding that looming Brexit talks also added to the geopolitical risk.

Gold prices have fallen more than 5 percent since the metal failed to sustain a break above its 200-day moving average at around $1,261 in late February.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.36 percent to 834.99 tonnes on Tuesday from Monday, the second daily increase in a row after outflows last week. [GOL/ETF]

Silver rose 0.3 percent to $16.88 an ounce.

Platinum was up 0.4 percent at $935.85 per ounce while palladium was slightly lower at $743. On Tuesday, palladium prices hit their lowest since Jan. 31 at $738.35.

(Additional reporting by Nallur Sethuraman in Bengaluru; editing by David Clarke and Susan Fenton)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Weak dollar underpins gold as market awaits Fed

LONDON (Reuters) - Gold edged up on Wednesday on a weaker dollar and uncertainty over the outcome of Dutch elections, although losses were slight as the market awaited clues from the Federal Reserve on the interest rate outlook.

By Zandi Shabalala

(Reuters) - Gold edged up on Wednesday on a weaker dollar and uncertainty over the outcome of Dutch elections, although losses were slight as the market awaited clues from the Federal Reserve on the outlook.

With an immediate U.S. rate increase seen as a done deal, investors are focusing on what message the central bank will deliver when it concludes a two-day meeting on Wednesday. In December, the Fed forecast three rate rises this year.

Spot gold was up 0.2 percent at $1,201 an ounce at 1553 GMT, while U.S. gold futures were 0.15 percent higher at $1,200.90 per ounce.

"The market is in wait and see mode for this afternoon when we hear what the Fed will do this year," Mitsubishi analyst Jonathan Butler said.

"The increase is largely in the price. The really interesting thing will be how hawkish the Fed sounds when they give the forecast of rate rises for the year," he said.

Gold is highly exposed to interest rates, as rising rates lift the opportunity cost of holding non-yielding bullion.

The statement from the Fed, due at 1800 GMT on Wednesday, will be followed by a briefing at 1830 GMT. [FED/DIARY]

The dollar was down 0.2 percent against a basket of major currencies ahead of the Fed statement, helping lift gold which is denominated in dollars and so became cheaper for holders of other currencies.

Investors were also focusing on Wednesday's elections in the Netherlands, which have been boosting gold's safe-haven appeal.

The Party for Freedom, which wants to "de-Islamicise" the country, is seen as having little chance of coming to power, but a strong performance could fuel worries about a surprise result in in April and May.

"There is a risk that the far-right candidate may have an influence election and there is some hedging in gold ahead of that," Mitsubishi's Butler said, adding that looming Brexit talks also added to the geopolitical risk.

Gold prices have fallen more than 5 percent since the metal failed to sustain a break above its 200-day moving average at around $1,261 in late February.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.36 percent to 834.99 tonnes on Tuesday from Monday, the second daily increase in a row after outflows last week. [GOL/ETF]

Silver rose 0.3 percent to $16.88 an ounce.

Platinum was up 0.4 percent at $935.85 per ounce while palladium was slightly lower at $743. On Tuesday, palladium prices hit their lowest since Jan. 31 at $738.35.

(Additional reporting by Nallur Sethuraman in Bengaluru; editing by David Clarke and Susan Fenton)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Business Standard
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Weak dollar underpins gold as market awaits Fed

By Zandi Shabalala

(Reuters) - Gold edged up on Wednesday on a weaker dollar and uncertainty over the outcome of Dutch elections, although losses were slight as the market awaited clues from the Federal Reserve on the outlook.

With an immediate U.S. rate increase seen as a done deal, investors are focusing on what message the central bank will deliver when it concludes a two-day meeting on Wednesday. In December, the Fed forecast three rate rises this year.

Spot gold was up 0.2 percent at $1,201 an ounce at 1553 GMT, while U.S. gold futures were 0.15 percent higher at $1,200.90 per ounce.

"The market is in wait and see mode for this afternoon when we hear what the Fed will do this year," Mitsubishi analyst Jonathan Butler said.

"The increase is largely in the price. The really interesting thing will be how hawkish the Fed sounds when they give the forecast of rate rises for the year," he said.

Gold is highly exposed to interest rates, as rising rates lift the opportunity cost of holding non-yielding bullion.

The statement from the Fed, due at 1800 GMT on Wednesday, will be followed by a briefing at 1830 GMT. [FED/DIARY]

The dollar was down 0.2 percent against a basket of major currencies ahead of the Fed statement, helping lift gold which is denominated in dollars and so became cheaper for holders of other currencies.

Investors were also focusing on Wednesday's elections in the Netherlands, which have been boosting gold's safe-haven appeal.

The Party for Freedom, which wants to "de-Islamicise" the country, is seen as having little chance of coming to power, but a strong performance could fuel worries about a surprise result in in April and May.

"There is a risk that the far-right candidate may have an influence election and there is some hedging in gold ahead of that," Mitsubishi's Butler said, adding that looming Brexit talks also added to the geopolitical risk.

Gold prices have fallen more than 5 percent since the metal failed to sustain a break above its 200-day moving average at around $1,261 in late February.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.36 percent to 834.99 tonnes on Tuesday from Monday, the second daily increase in a row after outflows last week. [GOL/ETF]

Silver rose 0.3 percent to $16.88 an ounce.

Platinum was up 0.4 percent at $935.85 per ounce while palladium was slightly lower at $743. On Tuesday, palladium prices hit their lowest since Jan. 31 at $738.35.

(Additional reporting by Nallur Sethuraman in Bengaluru; editing by David Clarke and Susan Fenton)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22