LONDON: Gold rose on Wednesday as the dollar eased slightly in the wake of weaker-than-expected US housing data, while investors awaited the release of the Federal Reserve’s Beige Book for direction on interest rates.
Spot gold rose 0.6 per cent to $1,413.66 per ounce as of 10:37 am EDT (1437 GMT). US gold futures rose 0.3pc to $1,415.20.
The Fed’s Beige Book, a summary of economic conditions across the United States, is due at 2 p.m eastern US time (1800 GMT).
“Gold bounced off its lows pretty good, but it’s waiting to see how the dollar will trade as well as the Fed’s Beige Book,” said Bob Haberkorn, senior market strategist at RJO Futures.
The dollar retreated slightly from a one-week high touched in the previous session, after a federal report showed US housing starts fell in June for a second straight month.
Investors are waiting for the July 30-31 FOMC (Federal Open Market Committee) meeting and have “priced in a 25 basis point cut. If the Fed does anything more, gold will trade higher,” RJO’s Haberkorn said.
Tuesday’s stronger-than-expected June US retail sales data dampened expectations the Fed would cut interest rates by 50 basis points (bps) rather than 25 bps at its month-end policy review.
Chicago Fed President Charles Evans said on Tuesday an interest rate cut of a half a percentage point at the Fed’s policy meeting could mean the Fed’s inflation goal is reached sooner.
“Gold remains locked within the $1,400-$1,420 range, while more broadly, we look for a move outside of $1,380-$1,440 for medium-term direction,” MKS PAMP said in a note.
Meanwhile, silver rose 1.6pc to $15.80 per ounce, extending gains for a fourth straight session. It touched a more than four-month high of $15.86 earlier in the session. Platinum rose 0.7pc to $843.57 per ounce, trading close to a two-month peak scaled on Tuesday, while palladium gained 1pc to $1,539.96.
Published in Dawn, July 18th, 2019
