* Spot gold still targets $1,193/oz- technicals
* Holdings of SPDR Gold Trust rose 0.83 pct on Monday
(Updates prices, adds comment)
By Arpan Varghese
March 14 Gold prices were steady on Tuesday as
investors waited for the start of a two-day U.S. Federal Reserve
meeting where the central bank is widely expect to raise
Signs of an uptick in inflation and continued strength in
the U.S. jobs market are expected to convince the Fed to hike
rates when the meeting concludes on Wednesday.
"At this moment, an interest rate hike will not be a
surprise, so any overreaction (to a hike in rates) is unlikely,"
said Mark To, head of research at Hong Kong's Wing Fung
"People will look for some clues on whether the interest
rate hike cycle will develop more rapidly than expected."
In December, the Fed raised its benchmark rate for just the
second time since the financial crisis of 2007-2009 and forecast
three rate rises in 2017. Higher rates will likely weigh on gold
prices as investors abandon the non-interest bearing metal to
seek higher returns in other assets.
Spot gold was mostly unchanged at $1,203.32 per ounce
at 0553 GMT.
U.S. gold futures were also steady at $1,202.8.
Investors are also focusing on Wednesday's Dutch elections.
The chance of a eurosceptic party coming to power in the
Netherlands is seen as small, but a strong election performance
could fuel speculation of a surprise result in French
presidential elections in April and May.
The uncertainty around the elections and the impact on the
cohesion of the European Union may support gold as investors
seek a safe-haven asset.
Gold is likely to trade in the $1,200-$1,250 per ounce
range for the coming few weeks, with prices supported by
political risks in Europe and also the lack of clarity over the
policies of U.S. President Donald Trump, To said.
"But on the other hand, there is the counter balance from
the interest rate hike," he added.
Spot gold is still targetting $1,193 per ounce, as suggested
by its wave pattern and a Fibonacci ratio analysis, according to
Reuters technical analyst Wang Tao.
"Leading into Wednesday's FOMC decision, participants will
be looking for gold to initially hold $1,200, while below this
broad interest around $1,190-$1,195 is expected to restrict
further declines," MKS PAMP Group trader Sam Laughlin said.
Meanwhile, holdings of the SPDR Gold Trust , the
world's largest gold-backed exchange-traded fund, rose 0.83
percent on Monday.
In other precious metals, silver inched up 0.1
percent to $16.93 per ounce.
Platinum rose 0.5 percent to $940.60 an ounce, while
palladium ticked up 0.1 percent to $751.90.
(Reporting by Arpan Varghese in Bengaluru; Editing by Joseph
Radford and Christian Schmollinger)