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PRECIOUS-Gold eases on firm dollar ahead of U.S. Fed meeting

Published 26/01/2021, 09:35 pm
© Reuters.
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* Dollar hits near one-week high

* Fed's two-day policy meeting to begin later on Tuesday

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

By Asha Sistla

Jan 26 (Reuters) - Gold fell on Tuesday as a slightly firmer dollar and uncertainty over a U.S. stimulus package kept bullion under pressure, with investors awaiting cues on future monetary policy decisions from the U.S. Federal Reserve.

Spot gold XAU= fell 0.2% to $1,852.10 per ounce by 1200 GMT. U.S. gold futures GCv1 was down 0.1% to $1,852.70.

"(Gold) is waiting for the Fed, it is waiting for a solid thing to emerge and as long as we continue to see the strength we've seen in stock markets over the past couple of weeks, the focus on safe havens is not as strong," said Saxo Bank analyst Ole Hansen.

"(The) Fall in bond yields yesterday helped offset some of that nervousness that crept into the market from potential inability to reach a (U.S. pandemic relief) deal. If they do reach a deal it might be a watered down version to get it through Congress, so that's also weighing on (the gold) market."

U.S. President Joe Biden's $1.9 trillion pandemic relief proposal faces hurdles as Republicans objected to it for being too expensive and pushed for a smaller plan targeting vaccine distribution. fell despite U.S. 10-year Treasury yields hitting a three-week low. Lower yields reduce the opportunity cost of holding non-yielding bullion. US/

"If the Fed signals that they're not looking to expand stimulus, and puts the seeds out there that they might have to consider exiting sooner than they currently think ... that could be very detrimental for gold," said DailyFX currency strategist Ilya Spivak.

The U.S. Federal Reserve was due to begin a two-day policy meeting later on Tuesday. dollar .DXY hit a near one-week high, making gold expensive for other currency holders. USD/

Silver XAG= rose 0.3% to $25.38 an ounce, platinum XPT= lost 0.9% to $1,088.77, and palladium XPD= fell 0.8% to $2,316.48.

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