PRECIOUS-Gold crawls up on weaker dollar as spotlight turns to Fed minutes

Credit: REUTERS/ATHIT PERAWONGMETHA

By Anjana Anil

Feb 20 (Reuters) - Gold ticked higher on Tuesday as the U.S. dollar pulled back, with investors keenly awaiting the minutes of the last U.S. Federal Reserve policy meeting to gauge the timing of interest rate cuts.

Spot gold XAU= was up 0.3% at $2,022.80 per ounce as of 0919 GMT. U.S. gold futures GCcv1 rose 0.5% at $2,034.70 per ounce.

The dollar index .DXY was down 0.1%, making greenback-priced bullion less expensive for buyers holding other currencies. USD/

The minutes from the Fed's January policy meeting are due on Wednesday.

"Markets will be focusing on the (Fed) minutes release as it portends to the expected rate cuts later this year. Surprise dovish clues should give bullion bulls a shot in the arm," said Han Tan, chief market analyst at Exinity Group.

"However, if policymakers have been found more willing to bide their time at the recent FOMC meeting, that may prompt spot gold to unwind some of the gains from recent sessions."

Despite "remarkable" progress on inflation, Fed Bank of San Francisco President Mary Daly said "there is more work to do" to ensure stable prices, while another Fed official cautioned against delaying rate cuts for too long.

Hotter-than-expected U.S. consumer prices and producer prices data last week dashed hopes around a rate cut in March.

Markets are currently pricing in a 77% chance of a cut in June, according to the CME Fed Watch Tool.

Lower interest rates boost the appeal of holding non-yielding bullion.

"Global central banks are diversifying foreign reserves and accumulating gold to hedge against geopolitical risks and economic uncertainties," analysts at ANZ Research wrote in a note.

Spot platinum XPT= gained 0.2% to $900.64 per ounce, palladium XPD= was down 1% at $945.32, while silver XAG= was steady at $23.02 per ounce.

(Reporting by Anjana Anil in Bengaluru; Editing by Savio D'Souza)

((Anjana.Anil@thomsonreuters.com;))

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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