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

PRECIOUS-Gold steadies on prospect of imminent U.S. rate rises

Published 14/03/2017, 06:35 am
© Reuters.  PRECIOUS-Gold steadies on prospect of imminent U.S. rate rises
XAU/USD
-
XAG/USD
-
GC
-
SI
-
PA
-
PL
-
GLD
-

* Focus on Wednesday's election in the Netherlands

* U.S. Fed rate rise on Wednesday priced in

* Spotlight on Fed statement and news conference (Updates prices; adds comment, second byline, NEW YORK dateline)

By Marcy Nicholson and Pratima Desai

NEW YORK/LONDON, March 13 (Reuters) - Gold prices were little changed on Monday as the prospect of imminent interest rate rises kept them near the five-week lows touched last week, while elections in Europe created uncertainty and fueled investor buying.

Spot gold XAU= was down 0.01 percent at $1,204.30 an ounce by 3:08 p.m. EST (1908 GMT). That compares with $1,194.55 last Friday, its lowest level since Jan. 31. U.S. gold futures GCcv1 settled up 0.1 percent at $1,203.10.

Investors are focusing on Wednesday's Dutch elections. The chance of a eurosceptic party coming to power in the Netherlands is seen as small but a strong election performance could fuel speculation of a surprise result in French presidential elections in April and May. MKTS/GLOB

Wednesday is also the second day of the U.S. Federal Reserve's two-day meeting. The widely expected decision to raise rates could boost the U.S. currency, which when it rises makes dollar-priced commodities more expensive for non-U.S. firms. FRX/

"A rate rise from the Fed is pretty much priced in, we're probably going to see two more hikes this year," said Oxford Economics analyst Daniel Smith. "A period of higher rates will tend to mean pressure on gold prices."

The statement from the Fed, due to be released Wednesday at 2 p.m. (1800 GMT) followed by a briefing at 1830 GMT, will be scrutinized for any changes in thinking among policymakers.

"Now, the debate shifts to Fed dots," said Wayne Gordon, analyst for UBS Wealth Management, retaining a long view and target price for gold at $1,300 per ounce.

"Some see the dots rising, and this week's quarterly Fed projections show a median of four. But we believe this year's dots will remain unchanged at three," he said, referring to the Fed policy-makers' forecasts that will be issued on Wednesday.

Traders said gold would have to close above $1,209, the 55-day moving average, to make further headway on the upside. Downside support remains at the psychological level of $1,200 an ounce.

Recent selling by investors can be seen in the holdings of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, which fell 1.06 percent to 825.22 tonnes on Friday. GOL/ETF

Hedge funds and money managers also slashed their net long positions in COMEX gold from the highest in three months in the week to March 7, U.S. Commodity Futures Trading Commission data showed on Friday. XAG= slid 0.6 percent to $16.92 an ounce, platinum XPT= lost 0.5 percent to $937.25 an ounce and palladium XPD= rose 0.95 percent to $750.75 an ounce.

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.