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Gold holds near 4-week highs with Fed meeting, Brexit in the spotlight

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Investing.com - Gold futures were little changed in North American trade on Tuesday, holding near the prior session's four-week high, as investors looked ahead to the Federal Reserve's policy meeting and the upcoming U.K. vote on whether to leave the European Union.

While the U.S. central bank is not expected to take action on interest rates at the conclusion of its policy meeting at 18:00GMT, or 2:00PM ET, Wednesday, it could provide guidance on its pace of tightening over the next several months.

Fed Chair Janet Yellen is to hold what will be a closely-watched press conference 30 minutes after the release of the Fed's statement, as investors look for any change in tone about the economy or future rate hikes. The central bank will also release its latest forecasts for economic growth and interest rates.

Investors all but ruled out a rate hike in June after U.S. employment data earlier this month showed the economy added just 38,000 jobs last month, the smallest increase since September 2010.

Market players are pricing in just a 2% chance for a rate hike this week and 23% for July, according to CME Group's (NASDAQ:CME) FedWatch tool. September odds were at about 37%.

Data on Tuesday showed that retail sales rose 0.5% last month, beating forecasts for a gain of 0.3%, while core sales inched up 0.4%.

The dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, rose 0.55% to 94.94, up sharply from last week's lows of 93.41.

Gold for August delivery on the Comex division of the New York Mercantile Exchange dipped 75 cents, or 0.06%, to trade at $1,286.15 a troy ounce by 12:39GMT, or 8:39AM ET.

A day earlier, gold rallied to $1,290.30, the most since May 16, amid mounting jitters over the upcoming referendum on whether the U.K. would remain in the European Union.

Recent polls suggested support for the U.K. campaign to leave the European Union is picking up. Britain's "Out" campaign widened its lead over the "In" camp ahead of the country's June 23 referendum, according to two opinion polls published by ICM on Monday.

Prices of the precious metal are up nearly 6% so far in June, after sliding more than 6% a month earlier, as market players reacted to shifting views on the timing of the next U.S. rate hike.

Gold is up 20% so far this year amid skepticism over the Federal Reserve's ability to raise interest rates as much as it would like this year.

The yellow metal is sensitive to moves in U.S. interest rates. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.

Elsewhere on the Comex, silver futures for July delivery shed 6.3 cents, or 0.36%, to trade at $17.38 a troy ounce during morning hours in New York, while copper futures slumped 1.8 cents, or 0.85%, to $2.036 a pound.

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


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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