Holdings in SPDR Gold Trust rose over 1 pct on Tuesday
* may test resistance at $1,253/oz – technicals
By K. Sathya Narayanan
BENGALURU, Dec 19 Gold prices climbed to a more than five-month peak on Wednesday as a softer dollar supported the bullion while investors awaited cues on the rate hike trajectory of the U.S. central bank from its two-day policy meeting.spot gold XAU= was up 0.1 percent at $1,250.56 per ounce, as of 0823 GMT, after hitting its highest since July 11 at $1,251.35 earlier in the session.U.S.GCv1 gained 0.1 percent to $1,254.40 per ounce.”The market is largely in a holding pattern as everyone is focusing on the FOMC (Federal Open Market Committee) meeting… We see prices largely range-bound,” said Benjamin Lu, a commodities analyst with Phillip Futures in Singapore.
“The market has priced in the fourth hike but what remains important is the foreguidance for 2019.”The Federal Reserve is widely expected to raise interest rates for the fourth time this year, but weak stock markets and slowing global growth may prompt it to tone down its stance on monetary tightening.Recent U.S. economic data was not encouraging and there is constant pressure from U.S. President Donald Trump on the Fed, said Ajay Kedia, director at Kedia Commodities in Mumbai.
Trump on Tuesday further sought to pressure the Fed as it prepared to start its meeting, warning the board not to “make yet another mistake” ahead of an expected interest rate hike. are seeing $1,240 as a good technical support and $1,258 as the first technical resistance and on breach of that level prices would go up to $1,270,” said Kedia, adding that prices would touch the $1,270 level if the Fed’s stance is dovish.Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar, in which it is priced.The , which measures the greenback against a basket of six major currencies, was down 0.3 percent, having hit a one-week low in the previous session. USD/Meanwhile, Asian share markets played second fiddle to bonds as a sharp fall in prices fanned speculation the Fed might be done with tightening after its policy meeting later in the day. MKTS/GLOB
Spot gold may test 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 Wang Tao, a Reuters market analyst for commodities and energy technicals. in SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, rose 1.08 percent to 771.79 tonnes on Tuesday. other precious metals, spot palladium rose 1.2 percent to $1,258.50 per ounce.
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