Gold steady ahead of Trump, Xi meet; March Fed minutes awaited
Gold prices held firm on Wednesday near a one-month high hit in the prior session, as appetite for riskier assets eased ahead of a meeting between leaders of the United States and China.
The market is looking for cues from the minutes of Federal Reserve’s March meeting expected to be released later in the day.
Spot gold was steady around $1,255.12 per ounce by 0332 GMT. U.S. gold futures inched down 0.1 percent to $1,257.10.
Spot gold on Tuesday hit its highest since Feb. 27 at $1,261.15, but failed to close above its 200-day moving average, a significant resistance, for the third time this year.
“This reflects the market’s uncertainty about the trend of the gold price in the near term,” said Jiang Shu, chief analyst at Shandong Gold Group.
“Whether the Federal Reserve would raise rates in June conference is not very certain. The market is waiting for more economic indicators from the U.S and speeches from Fed officials to assess the probability of rate hike in June.”
The Fed raised interest rates in March and has indicated at least two more hikes this year.
Gold prices, however, have only risen nearly $60 since the rate hike in March as worries over U.S. President Donald Trump’s polices and elections in Europe have increased the metal’s safe-haven appeal.
North Korea fired a ballistic missile on Wednesday from its east coast into the sea off the Peninsula, South Korea’s military said, ahead of the summit between the United States and China.
When U.S. President Donald Trump meets Chinese President Xi Jinping on Thursday and Friday, the event will be marked not only by deep policy divisions but a clash of personalities between America’s brash “tweeter-in-chief” and Beijing’s cautious, calculating leader.
Asian stocks rose on Wednesday though the underlying sentiment was still cautious with investors wary of taking big positions ahead of the meeting.
“The markets are waiting for the conference between the most important leaders in the world … If it does not turn out in a positive way, we might see a weak U.S. dollar and rising gold price,” Shu said.
Spot gold may retest a resistance at $1,261.03 per ounce, as suggested by its wave pattern and a Fibonacci retracement analysis, Reuters technical analyst Wang Tao said.
Spot silver fell 0.5 percent to $18.19 an ounce after touching one-month peak of $18.41 in the previous session.
Platinum dropped 0.2 percent to $956.55, while palladium fell 0.5 percent to $800.75.
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