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Gold dips as equities gain ahead of Fed policy meeting

Gold prices slipped on Monday as equity markets gained and the dollar steadied ahead of a US Federal Reserve policy meeting later this week.


Spot gold was down about 0.2 per cent at $1,299.15 per ounce by 0113 GMT. US gold futures fell 0.3 per cent to $1,299.10 an ounce. Spot palladium dipped 0.8 per cent to $1,547 an ounce, after registering its highest on record at $1,567.50 in the previous session.

The dollar was steady at 96.593, against a basket of major currencies, after falling 0.2 per cent in the previous session. Asian share markets crept ahead on Monday, while bonds were in demand globally on speculation that the US Federal Reserve would sound decidedly dovish at its policy meeting this week.

There is much talk Fed policymakers will lower their interest rate forecasts, or "dot plots", to show little or no further tightening this year.

Uncertainty on the outlook for the world economy and global trade as well as a sharp US growth slowdown expected by a range of forecasters mean that markets are on a hair trigger for signals from the Fed.

US manufacturing output fell for a second straight month in February and factory activity in New York state hit nearly a two-year low this month, offering further evidence of a sharp slowdown in economic growth early in the first quarter.

The Chinese government has additional monetary policy measures that it can take to support economic growth this year, and will even cut "its own flesh" to help finance large-scale tax cuts, Premier Li Keqiang said on Friday.

British Prime Minister Theresa May's government was scrambling on Sunday to get support in parliament for her Brexit deal at the third time of asking, aiming to persuade doubters with threats and promises to avoid any move to oust her.

President Donald Trump issued the first veto of his presidency on Friday to block a measure passed by Democrats and Republicans in Congress that would terminate his emergency declaration for a wall on the US border with Mexico.

South Africa's labour court has rejected a request by the Association of Mineworkers and Construction Union (AMCU) to hold an industry-wide strike covering the platinum and gold sectors, Anglogold Ashanti, Anglo American Platinum and Lonmin said on Friday.

Physical gold demand improved this week in India as a correction in local prices attracted buyers, particularly with the wedding season underway, while premiums in China rose on steady buying in the world's leading consumer.

Hedge funds and money managers trimmed their net long position by 6,097 contracts to 41,774 in COMEX gold in the week to March 12, the US Commodity Futures Trading Commission (CFTC) said on Friday.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell about 0.2 per cent on Friday.

Courtesy - Economic Times

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