You are here: Home » Markets » News
Business Standard

Gold edges up to 5-month peak on softer dollar, investors await Fed outlook

The Federal Reserve is widely expected to raise interest rates for the fourth time this year

Reuters  |  Bengaluru 

Gold

edged higher to a more than five-month peak on Wednesday as a softer dollar supported the bullion while investors awaited cues on the rate hike trajectory of the US central from its two-day policy meeting.

Spot gold was up 0.1 per cent at $1,250.20 per ounce, as of 0405 GMT, after hitting its highest since July 11 at $1,251.06 earlier in the session.

US gold futures were up 0.1 per cent at $1,254.60 per ounce.

"The market is largely in a holding pattern as everyone is focusing on the FOMC (Federal Open Market Committee) meeting... We see prices largely range-bound," said Benjamin Lu, a with in

"The market has priced in the fourth hike but what remains important is the foreguidance for 2019."

The Federal Reserve is widely expected to raise interest rates for the fourth time this year, but weak stock and slowing global growth may prompt it to tone down its stance on monetary tightening.

If it sounds dovish, prices should consolidate and hold at $1,256 and if it breaks that we might see prices going much further to $1,265, Lu added.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar, in which it is priced.

The dollar index, which measures the greenback against a basket of six major currencies, was down 0.3 per cent, having hit a one-week low in the previous session.

Meanwhile, Asian share played second fiddle to bonds as a sharp fall in fanned speculation the Fed might be done with tightening after its policy meeting later in the day.

"Gold continues to put in an active session as traders remain strong buyers on dips," Stephen Innes, at in Singapore, said in a note.

Spot gold may test a resistance at $1,253 per ounce, a break above which could lead to a gain into a range of $1,258-$1,266, according to Wang Tao, a

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 1.08 per cent to 771.79 tonnes on Tuesday.

Among other precious metals, spot palladium rose 1.5 per cent to $1,262.50 per ounce.

Silver was down 0.1 per cent at $14.63, while platinum was flat at $787.05.

First Published: Wed, December 19 2018. 09:56 IST
RECOMMENDED FOR YOU