Gold prices steady

BENGALURU. — Gold prices were steady yesterday as investors awaited a statement from the Federal Reserve for clues on the outlook for the US central bank’s monetary policy. “Markets are certainly a little bit cautious ahead of the Fed meeting and that’s probably hindering investor appetite,” said ANZ analyst Daniel Hynes.

The Fed concludes a two-day meeting later yesterday, and is widely expected to keep interest rates unchanged.

“I think the market will be looking for any comments around inflation,” Hynes said.

Spot gold fell 0,1 percent to $1 246,94 an ounce at 3.27am GMT. US gold futures for August delivery fell 0,5 percent to $1 246,30 per ounce.

“At this stage, we would rather be neutral on gold as Fed wording could throw the market off (in either direction),” said INTL FCStone analyst Edward Meir. Higher interest rates would push bond yields up and probably boost the dollar.

Higher yields increase the opportunity cost of holding non-interest-bearing gold, while a stronger dollar makes bullion more expensive for investors holding other currencies.

“Stronger US economic data has also weighed on gold, but has been negated by the weak inflation outlook,” Hynes said.

“Assuming that we don’t see any sort of change in language from the Fed meeting, I suspect we’ll see safe-haven demand pushing gold prices up,” he said, referring to recent support for the precious metal due to US political uncertainty.