By Arundhati Sarkar
(Reuters) – Gold prices inched higher on Wednesday, trading in a tight range as support from a weaker dollar countered concerns surrounding the U.S. Federal Reserve’s next interest rate decision.
Spot gold rose 0.1% to $1,963.86 per ounce by 0220 GMT. U.S. gold futures were listless at $1,979.70.
The dollar index weakened slightly, making gold less expensive for buyers holding other currencies.
The uptrend in gold is intact and the big question now is when will the Fed end its rate-hike campaign, said Ilya Spivak, head of global macro at Tastylive, adding that once there was more clarity on that, gold could see higher moves.
“If the Fed ends up looking more hawkish because inflation is more durable, now that headwinds like the debt ceiling are out of the way… the risk is significant,” he said.
Non-interest-bearing bullion tends to become less attractive in a high interest rate environment.
Supply gain pressures continued to abate in May, the New York Fed said in a report on Tuesday, further reducing what had been one of the key forces driving up inflation pressures around the world.
Ahead of the Fed meeting next week, the May U.S. consumer price report due on June 13 will provide investors more clarity about the health of the world’s largest economy following recent mixed economic data and dovish remarks from Fed officials.
Fed fund futures indicate traders have priced in an 80.6% chance that the Fed will hold interest rates in the 5%-5.25% range, according to CMEGroup’s Fedwatch tool. However, they see 51% odds of another 25-basis-point hike in July.
Meanwhile, Chinese trade figures for May top the Asia-Pacific economic data and events calendar on Wednesday, with investors keen to see whether April’s shock slump in imports is repeated.
Elsewhere, spot silver fell 0.1% to $23.5651 per ounce, while platinum rose 0.4% to $1,035.73. Palladium climbed 0.3% to $1,417.51.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.
Source: The Print