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PRECIOUS-Gold firms ahead of tariff deadline and central bank decisions

Published 12/12/2019, 12:00 am
© Reuters.  PRECIOUS-Gold firms ahead of tariff deadline and central bank decisions
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(Updates prices)

* U.S. Federal Reserve statement due at 2 p.m. (1900 GMT)

* ECB holds first policy meeting with Lagarde as president

* South African mine closures continue to support palladium

By Diptendu Lahiri

Dec 11 (Reuters) - Gold inched higher on Wednesday as investors sought safety from the threat of new U.S. tariffs on Chinese goods due to come into effect on Dec. 15 while also awaiting policy decisions from major central banks.

Autocatalyst metal palladium held steady just shy of a record high.

Spot gold XAU= had gained 0.1% to $1,465.88 per ounce by 1234 GMT. U.S. gold futures GCcv1 rose 0.2% to $1,470.30.

"The trade war continues to be a factor supporting gold, there's no easy solution to it and that uncertainty will keep gold prices up," said Commerzbank (DE:CBKG) analyst Eugen Weinberg.

U.S. President Donald Trump has days to decide whether to impose tariffs scheduled to take effect on Sunday on nearly $160 billion worth of Chinese goods.

The White House's top economic and trade advisers are expected to meet Trump in the coming days to discuss the issue, one person briefed on the situation told Reuters. is laying the groundwork for a delay but a final decision has not been made, the person said.

"Should both parties (the United States and China) fail to reach positive consensus, gold prices will receive strength over lacklustre risk appetites for the near term," Phillip Futures analyst Benjamin Lu said in a note.

Gold is considered a safe investment during political and economic uncertainty.

The U.S. Federal Reserve will issue a statement after its December policy meeting later on Wednesday. Although the central bank is expected to leave interest rates unchanged, investors are eager to hear its outlook for the economy, which has been affected by the tariff war. far as the central banks are concerned, it is not only the Fed that investors are looking at, but all the major central banks," Commerzbank's Weinberg said.

The European Central Bank will hold its first monetary policy meeting and news conference with Christine Lagarde as president on Thursday.

On the technical front, signals were mixed for the gold price as it kept bouncing towards a resistance at $1,466 per ounce, according to Reuters technical analyst Wang Tao. TECH/C

Palladium XPD= was flat at $1,896.50 an ounce, having surged past $1,900 for the first time on Tuesday.

Speculative buying and mine closures in major producer South Africa have supported palladium prices, which are expected to rise further in the longer term, a trader from Japanese retailer Tokuriki Honten Co. said. XAG= edged down 0.1% to $16.64 while platinum XPT= was little changed at to $921.91.

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