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PRECIOUS-Gold steady as US policymakers split on rate hike outlook


Reuters

(Adds comments, updates prices)
    * Fed minutes indicate split opinion on future rate hike
    * Gold firm after touching near two-month low in previous
session
    * Silver steady after hitting lowest since Dec on Wednesday

    By Nithin ThomasPrasad
    BENGALURU, July 6 (Reuters) - Gold held steady on Thursday,
after hitting an eight-week low in the previous session, as the
Federal Reserve minutes released on Wednesday showed the central
bank was split on how inflation might affect the future pace of
interest rate hikes.
    Spot gold <XAU=> was nearly flat at $1,226.70 per ounce at
0421 GMT. It touched $1,217.14 in the previous session, its
lowest since May 10.
    U.S. gold futures <GCcv1> for August delivery gained 0.4
percent to $1,226.40 per ounce.
    "The FOMC meeting minutes gave some strength to gold in the
previous session through the dollar's weakness," said Yuichi
Ikemizu, Tokyo branch manager at ICBC Standard Bank, adding that
"(investors) used this opportunity to buy back their positions."
    The details of the June 13-14 meeting, at which the Fed
voted to raise interest rates, showed several officials wanted
to announce a start to the process of reducing the Fed's large
portfolio of Treasury bonds and mortgage-backed securities by
the end of August but others wanted to wait until later in the
year. [nL1N1JW0DP]
    "There were split opinions on the timing of the balance
sheet tapering and the market took this to be a bullish factor,"
said Ikemizu.
    Higher interest rates tend to boost the dollar and push bond
yields up, putting pressure on gold prices by increasing the
opportunity cost of holding non-yielding bullion.
    U.S. data on tap later in the day includes the ADP
employment report, ISM non-manufacturing PMI and the initial
jobless claims. <ECONUS>
    Investors will also look to comments from San Francisco Fed
President John Williams and Fed Board Governor Jerome Powell.
    In the wider markets, most Asian stocks fell and the dollar
steadied. [MKTS/GLOB][USD/]
    "With the dollar relatively steady and U.S. equities firm,
we suspect that the short-term direction for gold will be lower
still," said INTL FCStone analyst Edward Meir.
    "The precious metal seems to be having trouble moving higher
and geopolitical tensions (specifically with North Korea) do not
seem to be much of a help," he added.
    The United States cautioned it was ready to use force if
need be to stop North Korea's nuclear missile program but said
it preferred global diplomatic action against Pyongyang for
defying world powers by test launching a ballistic missile that
could hit Alaska. [nL3N1JV4ME]
    Holdings in SPDR Gold Trust <GLD>, the world's largest
gold-backed exchange-traded fund, fell 0.66 percent to 840.67
tonnes on Wednesday. [nEMN0V177X]
    Among other precious metals, silver <XAG=> rose 0.1 percent
to $16.10 per ounce. In the previous session, it hit a low of
$15.84 an ounce, its lowest since Dec. 30.
    Platinum <XPT=> fell 0.5 percent to $905.65 per ounce after
hitting an over eight-week low in the previous session, while
palladium <XPD=> advanced 0.1 percent to $841.00 per ounce.

 (Reporting by Nithin Prasad and Vijaykumar Vedala in Bengaluru;
Editing by Joseph Radford and Gopakumar Warrier)
 ((Nithin.ThomasPrasad@thomsonreuters.com;)(within U.S. +1 651
848 5832, outside U.S. +91 80 6749 6325/1298)(; Reuters
Messaging: nithin.thomasprasad.thomsonreuters.com@reuters.net))

Keywords: GLOBAL PRECIOUS/



This article appears in: Fundamental Analysis , Stocks , World Markets , Economy


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