Gold steady as equities waver; Fed meeting awaited
Gold prices slipped on Thursday after breaking a five-day losing streak in the previous session, as the dollar rose slightly and uncertain equity markets boosted the metal’s safe-haven appeal ahead of the US Federal Reserve meeting next week.
Spot gold had slipped 0.3 per cent to $1,318.96 an ounce by 0730 GMT, and US gold futures were down 0.3 percent at $1,322.60 an ounce. While US interest rate futures indicate that expectations of an actual rate increase next week remain low, the dollar could get a lift from anything in the Fed’s statement that hints at a hike this year.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
Gold prices slipped on Thursday after breaking a five-day losing streak in the previous session, as the dollar rose slightly and uncertain equity markets boosted the metal’s safe-haven appeal ahead of the US Federal Reserve meeting next week.
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“While the market is predicting relatively low probability for September hike, they now seem to be more convinced that a December hike is highly probable,” said NAB analyst Vyanne Lai. “The market has been characterised by high volatility than few weeks before. Spot gold had slipped 0.3 per cent to $1,318.96 an ounce by 0730 GMT, and US gold futures were down 0.3 percent at $1,322.60 an ounce. While US interest rate futures indicate that expectations of an actual rate increase next week remain low, the dollar could get a lift from anything in the Fed’s statement that hints at a hike this year.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
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