Gold holds steady

BENGALURU. — Gold held steady yesterday to keep most of its gains from the previous session, with the dollar slipping after minutes of the US Federal Reserve’s last policy meeting downplayed the chance of more aggressive interest rate increases.

The minutes showed policy makers agreed they should hold off on raising interest rates until it was clear a recent US economic slowdown was temporary, although most said an increase was coming soon.

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 nonyielding bullion.

Spot gold was nearly flat at $1 258,61 per ounce by 3.26am GMT. It rose about 0,6 percent on Wednesday. US gold futures were up 0,5 percent at $1 258,70 per ounce.

“I do not think the market’s view for two more rate hikes has changed following the release of the Fed meeting minutes,” said Argonaut Securities analyst Helen Lau.

“It was not a very strong view from the Federal open market committee and hence gold hasn’t reacted,” she added.

Federal funds futures implied traders stuck with an 83 percent chance the Fed would raise rates by a quarter point at its June 13-14 meeting, according to CME Group’s FedWatch program.

“We think that the precious metal has weathered the prospect of a Fed increase rather well,” said INTL FCStone analyst Edward Meir. “We do see further strengthening ahead in light of what we think will be continued dollar weakness emanating from more Trump-related headaches emanating from Washington.”