GLD

Gold eases as investors await U.S. Fed's stance

Credit: REUTERS/CHINA STRINGER NETWORK

Gold fell on Wednesday as equities edged higher ahead of a U.S. Federal Reserve policy meeting verdict and as uncertainty lingered over a U.S. Congress coronavirus relief package.

* Holdings in SPDR Gold Trust at seven-year peak

* Silver eases from multiyear high

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Recasts, adds comments, updates prices)

By Nakul Iyer

July 29 (Reuters) - Gold fell on Wednesday as equities edged higher ahead of a U.S. Federal Reserve policy meeting verdict and as uncertainty lingered over a U.S. Congress coronavirus relief package.

Spot gold was down by 0.2% at $1,955.83 per ounce by 11:01 a.m. EDT (1501 GMT), trading below a record high of $1,980.57 scaled on Tuesday. U.S. gold futures rose 0.2% to $1,949.30 per ounce.

"Any consolidation that we're seeing in gold is a direct result of a bit of wait-and-see attitude ahead of the Fed meeting today and negotiations in Washington over the stimulus package as well," said David Meger, director of metals trading at High Ridge Futures.

Though the environment remains supportive for bullion, if the market believes any pullback in stimulus is likely, that would be a disappointment and the biggest threat to the gold market at this point, he added.

Investors are eyeing the Fed's policy statement, due at 2 p.m. EDT (1800 GMT) for clues about the central bank's monetary stance and its outlook for the economy.

U.S. President Donald Trump said his administration and the U.S. Congress remained far apart on a coronavirus relief bill and suggested he was not in a hurry to strike a deal.

Some support from fiscal policy should prove dollar supportive and would also reduce the pressure on the Fed to deliver additional easing, HSBC analysts wrote in a note.

"This would also be gold bearish and could take some of the steam out of the upside for bullion and lead to consolidation," they wrote. Massive stimulus packages to aid economies reeling from pandemic-driven woes and a low interest rate environment have helped drive gold prices up over 28% so far this year.

Investors continued to pile into gold-backed exchange-traded funds, with holdings in the SPDR Gold Trust at an over seven-year peak.

Silver dropped 1.8% to $24.12 per ounce, platinum fell 2.2% to $927.12 per ounce and palladium slipped 5.9% to $2,148.59 per ounce. (Reporting by Nakul Iyer in Bengaluru; editing by Jonathan Oatis) ((nakul.iyer@thomsonreuters.com; Within U.S. +1 646 223 8780, Outside U.S. +91 80 6749 0417; Reuters Messaging: nakul.iyer.thomsonreuters.com@reuters.net)) Keywords: GLOBAL PRECIOUS/ (UPDATE 6)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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