Gold steady after hitting nine-month peak on Fed rate freeze; eyes monthly gain

Reuters 

By Arijit Bose

Spot gold was unchanged at $1,320.01 per ounce at 2:14 p.m. ET (1914) GMT. The session high was $1,326.30, the highest since April 26.

Spot gold has gained nearly 3 percent so far this month.

U.S. gold futures settled up 0.7 percent to $1,319.70.

"The ongoing trend in precious metals markets continues. The much more dovish-than-expected Fed stance continues to support commodity prices across the board, weaken the dollar and support the precious metals complex as well," said David Meger, trading at High Ridge Futures.

The dollar also modestly extended losses after data showed the number of Americans filing for unemployment benefits rose to a 1-1/2-year high, feeding concerns of an economic slowdown. [USD/]

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, have climbed 4.6 percent this month, the biggest monthly gain since September 2017. [GOL/ETF]

The held interest rates steady on Wednesday but said it would be patient in lifting borrowing costs further this year as it pointed to rising uncertainty over the U.S. economic outlook.

Analysts said market players see a much slimmer chance of a rate hike, while the yield curve now points to possible future Fed rate cuts. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

"The market now sees about a one-in-four chance of a 2019 Fed rate hike, while the curve is pointing to a small chance of a cut occurring as early as 2020," said in a note.

While the propelled world stocks to their biggest January gains on record, risks to the global economy remain, with market participants focused on trade talks between the and [MKTS/GLOB]

Investors worry Washington's criminal charges against Chinese company and its could hurt the talks.

If the sides cannot reach a deal, has threatened to more than double tariffs on Chinese goods on March 2.

Global demand for gold rose 4 percent last year, as central surged to their highest levels since 1967, the said.

Palladium was down 1.4 percent to $1,341.50, while platinum fell 0.1 percent to $814.00.

Silver lost 0.4 percent to $16.00, having hit its highest since July 2018, at $16.19, during the session.

(Reporting by Arijit in Bengaluru; Editing by David Gregorio)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, February 01 2019. 01:10 IST