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PRECIOUS-Gold hits more than 1-week low on doubts over stimulus bill, firm dollar

Published 28/01/2021, 02:49 am
© Reuters.
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* Dollar scales over 1-week high

* Palladium hits over one-month low

* Platinum slips to over two-week low

* Interactive graphic tracking global spread of coronavirus: https://tmsnrt.rs/3mvcUoa (Updates prices)

By K. Sathya Narayanan

Jan 27 (Reuters) - Gold prices fell to a more than one-week low on Wednesday, pressured by concerns over the U.S. stimulus bill and strength in the dollar as markets awaited the Federal Reserve's latest policy decision.

Spot gold XAU= fell 0.3% to $1,845.61 per ounce by 1:41 p.m. EST (1841 GMT), having earlier touched its lowest since Jan. 18. U.S. gold futures GCv1 settled down 0.6% at $1,844.90.

"Ahead of the Federal Open Market Committee's statement, you are having lower equities and the dollar is catching a bit of a bounce," which is weighing on the gold market, said Bob Haberkorn, senior market strategist at RJO Futures. MKTS/GLOB

The dollar .DXY rebounded to a more than one-week high against rivals, making gold costlier for investors holding other currencies.

"The $1.9 trillion (U.S. stimulus) was pretty ambitious and I don't think (President) Biden has the support to pass it," Haberkorn added. "That is another reason why gold is not trying to get back above $1,900."

The Biden administration's stimulus plan faced strong opposition from Republicans over the size of the package. Federal Reserve is expected to reinforce its commitment to accommodative monetary policy to aid the virus-hit economy in its policy decision due at 1900 GMT. drive gold towards the upper end of the (narrow) range, (the Fed) will need to adopt a fairly dovish tone, which will push U.S. 10-year yields back below 1% - that will help gold," CMC Markets UK's chief market analyst Michael Hewson said.

Easy monetary policy tends to weigh on government bond yields, increasing the appeal of non-yielding gold.

Silver XAG= fell 0.4% to $25.35 an ounce. Platinum XPT= shed 2.3% to $1,072.57, having touched its lowest since Jan. 12 at $1,056.70.

Palladium XPD= fell 0.9% to $2,304.39 per ounce, having fallen to its lowest since Dec. 21 at $2,292.90 earlier in the session.

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