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PRECIOUS-Gold flat after uncertain Fed outlook

Published 19/09/2019, 04:43 pm
© Reuters.  PRECIOUS-Gold flat after uncertain Fed outlook
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* BoJ leaves interest rates unchanged

* Gold targets $1,446/oz - technicals (Updates prices)

By Karthika Suresh Namboothiri

Sept 19 (Reuters) - Gold prices were little changed on Thursday after a sharp fall in the previous session as a lack of clarity in the U.S. Federal Reserve's monetary policy outlook kept investors cautious.

The Fed lowered interest rates for a second time this year in a 7-3 vote on Wednesday but signalled further cuts are unlikely as the labour market remains strong. cut was widely expected, but the split vote has raised some concern about predicting the future path of monetary policy.

"Traders are disappointed by the divergence of future rate cut path and the market is unwinding expectations of a few more cuts in the months to come," said Margaret Yang Yan, a market analyst at CMC Markets.

Lower interest rates reduce the opportunity cost of holding non-yielding gold, and weigh on the dollar.

Spot gold XAU= inched 0.1% higher to $1,495.36 per ounce as of 0636 GMT, after falling as much as 1% on Wednesday. However, U.S. gold futures GCcv1 were down 0.8% at $1,503.

Central banks globally are facing increasing pressure to dole out monetary support for flagging economies as the U.S.-China trade dispute hits global economic growth.

"Gold looks vulnerable. If the Fed is right to proceed with caution – meaning the global environment is not as dire as stimulus-hungry markets seem to envision – that implies less scope for overall easing," said Ilya Spivak, a senior currency strategist at DailyFx.

A close below $1,480 would set the stage for a retest of the $1,400 level initially and may then pave the way for a deeper pullback, he said.

Meanwhile, the Bank of Japan kept monetary policy steady but said it would re-examine economic and price developments more thoroughly at its next policy meeting, amid growing risks to the country's fragile economic recovery. gold is poised to break a support at $1,488 per ounce and fall to the next support at $1,446, according to Reuters technical analyst Wang Tao. other precious metals, silver XAG= dipped slightly to $17.72, and platinum XPT= and palladium XPD= were both barely changed at $930.34 and $1,590.79 respectively.

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