🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

PRECIOUS-Gold edges up ahead of Fed on softer dollar, weak U.S. data

Published 27/04/2016, 05:04 pm
PRECIOUS-Gold edges up ahead of Fed on softer dollar, weak U.S. data
XAU/USD
-
XAG/USD
-
GC
-
SI
-
CL
-

* Gold rises for third straight day

* Asian shares, dollar slip

* Coming up: Fed statement after policy meeting at 1800 GMT (Updates prices)

By A. Ananthalakshmi

SINGAPORE, April 27 (Reuters) - Gold ticked higher for a third straight session on Wednesday on a softer dollar and weak U.S. economic data, but the metal traded in a tight range as investors waited for the Federal Reserve's policy decision later in the session.

The dollar extended losses against a basket of major currencies as investors believed the weakness in the U.S. economy would prompt the Fed to be cautious about raising rates.

The Fed is likely to keep rates steady later on Wednesday, and the focus rests squarely on the tone of its statement and any timing for an eventual rate hike. The U.S. central bank raised rates in December for the first time in nearly a decade.

Spot gold XAU= had risen 0.3 percent to $1,246.20 an ounce by 0655 GMT, following a 0.4-percent gain in the previous session. Silver XAG= rose 1 percent to $17.33.

"Gold ground higher, continuing to trade in a tight range. The weaker dollar has supported demand, but investors remain wary heading into the central bank meetings," ANZ analysts said.

"An unchanged economic outlook and a more balanced assessment of the risks should enhance the Fed's confidence to proceed with further normalisation," they said.

OCBC Bank said the Fed "could strike a careful balance between calling for gradual policy normalisation and making sense of the recent spate of mixed economic data amid slightly stronger crude oil prices."

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

It has rallied 17 percent this year on speculation that the Fed may not raise rates this year amid uncertainty over the global economy.

Data on Tuesday showed orders for long-lasting U.S. manufactured goods rebounded far less than expected in March, implying that business spending and economic growth were weak in the first quarter. Another report showed an ebb in consumer confidence in April. prices that hit a 13-month high last month are likely to fall back in the short term because of a slump in demand from key Asian consumers, GFMS analysts at Thomson Reuters said in a report on Tuesday.

Global gold demand tumbled by 24 percent year on year to 781 tonnes in the first three months of the year, its weakest quarter in seven years, GFMS said. AT 0655 GMT

Metal

Last

Change Pct chg

Spot gold

1246.2

3.61

0.29 Spot silver

17.33

0.167

0.97 Spot platinum

1015

7

0.69 Spot palladium

605.4

4.9

0.82 Comex gold

1247.7

4.3

0.35 Comex silver

17.375

0.265

1.55

COMEX gold and silver contracts show the most active months

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.