The price of gold edged higher in early Asian trade on Monday as investors await a key U.S. Federal Reserve meeting that could see the central bank suspend interest rate hikes after July.
FUNDAMENTALS
* Spot gold rose 0.051 to $1,961.27 an ounce at 0049 GMT. Bullion gained almost 0.3% last week.
* US gold futures fell 0.2% to $1,963.10.
* The dollar index remained flat, holding near its more than a week high hit on July 20, limiting gold’s upside as a stronger dollar makes the metal more expensive for holders of other currencies.
* This week, after the Fed, decisions from the European Central Bank (ECB) and the Bank of Japan will all come in the 48-hour period from Wednesday to Friday.
* Markets are pricing in quarter-point hikes from the Fed and ECB, so the focus will be on what Fed Chair Jerome Powell and ECB Chair Christine Lagarde have to say about the future.
* Higher interest rates increase the opportunity cost of holding bullion with no yield.
* China’s Politburo meeting this week could see further stimulus announced, although investors have so far been disappointed by Beijing’s actions.
* The BOJ, however, is expected to keep monetary policy and yield controls unchanged, according to economists polled by Reuters.
* Demand for physical gold stagnated in India in the week ending July 21, while bullion sold at high prices in China, one of the main consuming countries.
* SPDR Gold Trust, the largest gold-backed exchange-traded fund, said its holdings rose 0.57% to 919.00 tonnes on July 21 from 913.80 tonnes on July 20.
* Spot silver rose 0.2% to $24.64 an ounce, platinum fell 0.2% to $959.94, while palladium was little changed at $1,289.83.
This article is originally published on zonebourse.com
