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PRECIOUS-Gold dips, but lingers near 4-wk high ahead of Fed meeting

Published 14/06/2016, 05:23 pm
© Reuters.  PRECIOUS-Gold dips, but lingers near 4-wk high ahead of Fed meeting
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* Fed meeting begins later on Tuesday

* Silver trading near one-month high

* Brexit fears weigh on market sentiment (Recasts, updates prices)

By Koustav Samanta

BENGALURU, June 14 (Reuters) - Gold inched down on Tuesday as investors waited for cues from a two-day U.S. Federal Reserve meeting beginning later in the day and a June 23 referendum that will decide whether Britain will exit the European Union.

Spot gold XAU= was down 0.4 percent at $1,279.16 an ounce as of 0648 GMT, but has gained more than 5 percent this month, hitting a peak of $1,287 on Monday, its highest since May 16.

U.S. gold GCcv1 fell 0.4 percent to $1,282.30.

"I think investors have decided to take profits and some of them are staying on the sidelines before taking a decision on what to do next until the Fed makes an announcement," said Brian Lan, managing director at Singapore-based gold dealer GoldSilver Central.

Bullion, which is often perceived as a hedge against economic and financial uncertainty, has been driven by rising investor risk aversion before key central bank meetings this week.

Apart from the Fed, the Bank of England, Swiss National Bank and the Bank of Japan will meet this week, and are expected to hold monetary policies steady against a backdrop of caution about the global economic outlook.

The safe-haven appeal of gold, which is near a four-week high hit in the previous session, could get a further boost if a vote by Britain to leave the 28-member group, dubbed "Brexit," pushes Europe back into a recession.

The British pound remained fragile near a two-month low against the dollar, while Asian stocks slipped on Tuesday on concerns ahead of the referendum. USD/ MKTS/GLOB

Britain's "Out" campaign widened its lead over the "In" camp ahead of the referendum, according to two opinion polls published by ICM on Monday. think that the risk of Britain leaving has now increased substantially and the Fed will therefore signal its willingness in no uncertain terms to 'stay the course' in light of this potential 'Black Swan' event," INTL FCStone analyst Edward Meir said in a note.

"This will likely enable gold to push even higher over the next few days, at least until the polls start to swing the other way."

Meanwhile, Hong Kong Exchanges and Clearing Ltd 0388.HK is aiming to launch its planned physically-delivered gold futures contract in September, its head said on Tuesday. in SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, rose 0.27 percent to 896.30 tonnes on Monday, the highest since October 2013. GOL/ETF

Spot silver XAG= fell 0.8 percent to $17.29 per ounce, after touching a one-month high of $17.45 on Monday.

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