PRECIOUS-Gold holds steady, dollar strength weighs on market
December 12, 2018
Gold prices held steady on Wednesday, underpinned by expectations of fewer rate hikes by the U.S. Federal Reserve next year, while a stronger dollar weighed on the market.
Spot gold was down 0.1 percent at $1,242.10 per ounce at 07:22 GMT, while U.S. gold futures rose 0.1 percent to $1,247.8 per ounce.
Gold is under pressure due to an appreciation in the dollar index, said Amit Kumar Gupta, portfolio management services head at Adroit Financial Services in New Delhi, adding that prices were going to be consolidated until the Federal Open Market Committee (FOMC) meeting.
The Fed is widely expected to raise rates at its Dec. 18-19 meeting, but the market is focusing on how much further it might lift rates next year, after recent comments by Fed members to decide the monetary policy based on data have been taken as a signal for lower rate hikes in 2019.
Indicative of investor sentiment toward the bullion, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.43 percent to 763.56 tonnes on Tuesday, the highest since late August.
Spot gold is biased to retest a resistance at $1,253 per ounce, a break above which could lead to a gain into a range of $1,258-$1,266, according to Reuters technical analyst Wang Tao.
Among other precious metals, spot palladium was down 0.4 percent at $1,238.20 per ounce. It briefly traded at a premium to gold, having touched a session high of $1,248.05.
The metal climbed 2 percent in the previous session after China agreed to cut tariffs on U.S.-built cars and auto parts to 15 percent from the current 40 percent.
Spot silver was up 0.2 percent at $14.56 per ounce, while platinum was 0.2 percent higher at $782.90 per ounce.