Gold slips as dollar halts slide ahead of Fed policy decision

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Spot gold was down 0.4 per cent at $1,951.24 per ounce. -  Reuters
Spot gold was down 0.4 per cent at $1,951.24 per ounce. - Reuters

Bengaluru - Gold up more than 28% so far this year.

By Brijesh Patel

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Published: Wed 29 Jul 2020, 10:57 AM

Last updated: Wed 29 Jul 2020, 1:13 PM

Gold eased on Wednesday as the dollar briefly halted its slide and investors booked profits from a record rally, with some caution setting in as focus turned to a US Federal Reserve meeting widely expected to reinforce loose
monetary policy.
Spot gold was down 0.4 per cent at $1,951.24 per ounce by 0601 GMT. Prices hit an all-time high of $1,980.57 on Tuesday. US gold futures rose 0.1 per cent to $1,947.40.
Gold prices in Dubai for 24K touched Dh236.00 per gram for 22K at 221.75 per gram; 21K at 211.50 per gram and 18K at 181.25 per gram.
Gold is closely following moves in the dollar, which has halted its fall, said DailyFx currency strategist Ilya Spivak. "As we get closer to the Fed announcement and the event risk, the market will get a bit more wary," Spivak added.
The dollar index was little changed at 93.668 , having touched its lowest level since June 2018 this week. A weaker dollar, also considered a rival safe haven, makes gold cheaper for holders of others currencies.
Coronavirus cases continued to surge in the United States and stood at over 16.6 million globally.

Its intensifying spread and an escalation in US-China tensions have dented hopes of quick economic recovery, and have been driving inflows to safe-haven assets like gold, which has risen more than 28 per cent so far this year.
The Fed will publish its interest rate decision at 1800 GMT, widely expected to keep rates unchanged, following which Chair Jerome Powell is scheduled to hold a press conference.
"I expect the Fed to maintain its uber-dovish tone and this will support precious metals prices," said Jeffrey Halley, a senior market analyst at OANDA.
Gold tends to gain when interest rates are low, which reduces the opportunity cost of holding non-yielding bullion. It's also considered a hedge against inflation and currency debasement as central bank pump out stimulus. Republicans in the White House and the US Congress struggled to reach a deal over a $1 trillion aid plan.

Elsewhere, silver dropped 1.7per cent to $24.16 per ounce, platinum fell 1.3per cent to $936.09 and palladium slipped 0.6per cent to $2,269.22. - Reuters,

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