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PRECIOUS-Gold up on Fed caution over rates; higher equities cap gains

Published 07/04/2016, 11:00 am
Updated 07/04/2016, 11:10 am
© Reuters.  PRECIOUS-Gold up on Fed caution over rates; higher equities cap gains
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SINGAPORE, April 7 (Reuters) - Gold ticked up on Thursday after minutes from the Federal Reserve's last policy meeting showed caution over higher U.S. interest rates, but the metal's gains were capped by strength in global equities.

FUNDAMENTALS

* Spot gold XAU= had risen 0.3 percent to $1,224.86 an ounce by 0047 GMT.

* Bullion slid 0.7 percent on Wednesday as global equity markets posted solid gains, aided by a climb in oil prices and a surge in healthcare stocks. MKTS/GLOB

* Stronger equities dent the safe-haven appeal of gold.

* Weakness in the dollar supported gold. The greenback wallowed close to a 17-month low against the yen on Thursday. USD/

* Minutes from the Fed's March 15-16 policy meeting released on Wednesday showed that policymakers debated whether an interest rate hike would be needed in April though a consensus emerged that risks from a global economic slowdown warranted a cautious approach.

* Policymakers had signalled at the close of that meeting that they expected to raise rates twice in 2016 but the timing of the hikes still appears up in the air. After the minutes, traders added slightly to bets that the Fed will raise rates earlier than December, the timing that had been expected before the release.

* Gold, which is sensitive to rate increases as they lift the opportunity cost of holding the non-interest-yielding metal, posted its biggest quarterly rise in nearly 30 years in the first three months of 2016 as expectations for rate rises faded.

* Assets in SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, rose 0.51 percent to 819.60 tonnes on Wednesday, the first inflow in nearly two weeks.

* For the top stories on metals and other news, click TOP/MTL or GOL

DATA AHEAD (GMT)

0645 France Trade data Feb

1230 U.S. Weekly jobless claims

1900 U.S. Consumer credit Feb

2130 Federal Reserve Chair Janet Yellen participates in a conversation with current and former Federal Reserve chairmen

PRICES AT 0047 GMT

Metal

Last

Change Pct chg

Spot gold

1224.86

3.01

0.25 Spot silver

15.06

0.004

0.03 Spot platinum

947.2

5.2

0.55 Spot palladium

541

1

0.19 Comex gold

1226.3

2.5

0.2 Comex silver

15.09

0.036

0.24

COMEX gold and silver contracts show the most active months

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