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PRECIOUS-Gold slips ahead of Fed statement, but Brexit worries underpin

Published 15/06/2016, 11:22 am
© Reuters. PRECIOUS-Gold slips ahead of Fed statement, but Brexit worries underpin
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BENGALURU, June 15 (Reuters) - Gold dipped slightly on Wednesday, after touching a near six-week high in the previous session, as the market awaited the U.S. Federal Reserve's policy statement and amid concerns over a potential British exit from the European Union.

FUNDAMENTALS

* Spot gold XAU= was down 0.2 percent to $1,282.91 an ounce by 0102 GMT. Bullion touched a session-peak of $1,289.80 on Tuesday, its highest since May 6.

* U.S. gold GCcv1 edged 0.2 percent lower to $1,286.20

* A statement from the Fed is expected later in the day after the conclusion of its two-day Federal Open Market Committee (FOMC) meeting.

* U.S. retail sales rose strongly in May suggesting that economic growth was gaining steam despite a sharp slowdown in job creation. U.S. economy is on track to grow by a 2.8 percent annualized rate in the second quarter, Atlanta Federal Reserve's GDPNow forecast model showed on Tuesday. Evidence that the U.S. neutral rate of interest remains stalled near zero may slow the Fed rate hikes even more than expected. A vote on June 23 by Britain to leave the 28-member EU, dubbed "Brexit," could tip Europe back into recession, putting more pressure on the global economy.

* Jeffrey Gundlach, the chief executive of DoubleLine Capital, said investors are dropping risky assets and turning to safer securities including Treasuries and gold because they are losing faith in central banks. Gold priced in sterling rose to its highest since September 2013 on Tuesday as the British pound fell to a fresh 8-week low versus the dollar GBP= . The euro nursed losses against the dollar early on Wednesday Holdings in SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, 0.27 percent to 898.67 tonnes on Tuesday, the highest since October 2013. GOL/ETF

* South Africa's National Union of Mineworkers (NUM) said its members will return to work for the nightshift on Tuesday at Northam Platinum's NHMJ.J Zondereinde after staying away since Monday last week after violence broke out at the site. For the top stories on metals and other news, click TOP/MTL or GOL

MARKET REPORT

* Asian shares dipped to near three-week lows while safehaven assets such as U.S. bonds and the yen were in demand on Wednesday. The dollar was little changed against the yen, having pulled back from an overnight low of 105.63. MKTS/GLOB USD/

DATA AHEAD (GMT)

0900 Euro zone Eurostat trade

Apr

1230 U.S. New York Fed manufacturing

Jun

1315 U.S. industrial output

May

1800 Federal Open Market Committee releases policy statement

1830 Fed Chair Janet Yellen holds news conference

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