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Gold slips from 2-week high as dollar rises after Fed

Published 17/09/2020, 11:13 am
© Reuters.
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Sept 17 (Reuters) - Gold prices eased on Thursday as the U.S. dollar firmed, although doubts over a swift global economic recovery and the Federal Reserve's pledge to hold interest rates near zero until at least 2023 limited losses for the safe-haven metal.

FUNDAMENTALS

* Spot gold XAU= was down 0.3% to $1,954.42 per ounce by 0034 GMT, after hitting its highest since Sept. 2 at $1,973.16 on Wednesday.

* U.S. gold futures GCv1 fell 0.4% to $1,962.90.

* The dollar index .DXY rose 0.1% against its rivals, making gold more expensive for holders of other currencies. Longer-term U.S. Treasury yields hit their highest levels this week. USD/ US/

* The Fed signalled on Wednesday it expects the U.S. economic recovery from the coronavirus crisis to accelerate with unemployment falling faster than the central bank expected in June. It also said it would keep rates at near zero levels until inflation is on track to "moderately exceed" its 2% inflation target "for some time." Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

* Meanwhile, data showed U.S. consumer spending slowed in August, pointing to a stall in the economic recovery from the effects of the pandemic. Asian shares were set to drift lower on Thursday as concerns about the strength of the economic recovery remained. MKTS/GLOB

* The Bank of Japan is set to keep monetary policy steady on Thursday, while the Bank of England is expected to signal that it is getting ready to pump yet more stimulus into Britain's economy. Silver XAG= dropped 0.8% to $27 per ounce, platinum XPT= dipped 0.9% to $959.58 and palladium XPD= slipped 0.9% to $2,378.86.

DATA/EVENTS (GMT) 1100 UK

BOE Bank Rate

Sept 1230 US

Housing Starts Number

Aug 1230 US

Initial Jobless Clm

Weekly 1230 US

Philly Fed Business Indx Sept

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