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PRECIOUS-Gold holds overnight gains after Fed keeps rates steady

Published 12/12/2019, 01:28 pm
Updated 12/12/2019, 01:35 pm
© Reuters.  PRECIOUS-Gold holds overnight gains after Fed keeps rates steady
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Dec 12 (Reuters) - Gold prices on Thursday hovered near a one-week high hit in the previous session, as the dollar nursed its steepest losses in weeks after the U.S. Federal Reserve stood pat on interest rates and signalled moderate economic growth for next year.

FUNDAMENTALS

* Spot gold XAU= was largely unchanged at $1,474.71 per ounce, by 0217 GMT. In the previous session, the bullion hit $1,478.80, its highest since Dec. 5.

* U.S. gold futures GCcv1 were up 0.3% at $1,479.10.

* Gold prices gained 1% on Wednesday, after the Fed held interest rates steady and signalled borrowing costs will not change anytime soon, with moderate economic growth and historically low unemployment expected to persist through the 2020 presidential election. The dollar fell to a four-month low after the central bank's announcement, making gold cheaper for holders of other currencies. USD/

* Lower interest rates reduce the opportunity cost of holding bullion and weigh on the dollar.

* Traders are bracing for a series of make-or-break events over the next few days that have the potential to cause huge swings in financial markets for months to come.

* On the trade front, U.S. President Donald Trump is expected to meet top advisers on Thursday about tariffs on nearly $160 billion in Chinese consumer goods set to kick off on Dec. 15, three sources familiar with the plans said. Investors were also focused on Christine Lagarde's first meeting of the European Central Bank later in the day. In the UK, voters will go to the polls in an election that will pave the way for Brexit under Prime Minister Boris Johnson or propel Britain towards another referendum that could ultimately reverse the decision to leave the European Union. Palladium XPD= rose 0.1% to $1,911.84 an ounce. Plagued by supply deficit, the autocatalyst metal notched an all-time high of $1,917.50 earlier in the session.

* The metal surpassed $1,900 for the first time ever on Tuesday as mines across South Africa shut down after flash flooding triggered the most severe power blackouts in more than a decade, threatening a key export sector. Holdings of the world's largest gold-backed exchange-traded fund SPDR Gold Trust GLD rose 0.03% to 886.22 tonnes on Wednesday. Elsewhere, silver XAG= was up 0.2% at $16.89 per ounce, while platinum XPT= fell 0.2% to $936.60.

DATA/EVENTS (GMT) 0700 Germany HICP Final YY

Nov 0745 France CPI (EU Norm) Final MM, YY

Nov 1200 India

Industrial Output YY

Oct 1245 EU

ECB Refinancing & Deposit Rates Dec 1300 Russia GDP YY Quarterly Revised

Q3 1330 US

Initial Jobless Claims

weekly 1330 Germany Press conference following the governing council meeting of the ECB in Frankfurt 1700 US

The Federal Reserve releases quarterly financial accounts of the United States

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