July 25, 2017 / 4:11 AM / a year ago

PRECIOUS-Gold prices inch up; Fed meeting in focus

    * Spot gold may test support at $1,250/oz - Technicals
    * Fed begins two-day meet later in the day
    * Platinum off five-week highs hit in the previous session

 (Updates prices)
    By Nithin ThomasPrasad
    BENGALURU, July 25 (Reuters) - Gold prices edged higher on
Tuesday, after hitting a one-month high in the previous session,
buoyed by political uncertainty in the United States, as
investors awaited the Federal Reserve meeting for clues on
monetary policy.
     Investors also braced for possible hints on when the next
interest rate hike is coming, ahead of the Fed's rate-setting
two-day committee meet starting on Tuesday.             
    "While no rate hike is expected, the market is likely to
remain subdued leading into the meeting," analysts at ANZ
Research said in a note.
     Spot gold        was up 0.2 percent at $1,256.71 per ounce,
as of 0626 GMT. In the previous session, it touched $1,258.79 an
ounce, its highest since June 23.
    U.S. gold futures         for August delivery climbed as
much as 0.2 percent to $1,257.00 per ounce.
    "We remain cautiously constructive on gold as we see no end
to dollar weakness for the moment given the ongoing political
dramas in Washington and the approaching deadline to extend the
debt ceiling," said INTL FCStone analyst Edward Meir.
    The U.S. dollar languished near a 13-month low against a
basket of currencies on Tuesday, with traders sceptical that
this week's U.S. Federal Reserve meeting would do much to alter
the greenback's recent weak trend.       
    The greenback was also clouded by worries that persistent
political disorder would present obstacles to U.S. President
Donald Trump's stimulus and tax reform agenda. 
    "There seems to be very little progress being made on a
number of 'pro-growth' Trump initiatives, all being net bullish
for gold," Meir added.    
    The Republican Party's repeated failures to overhaul the
healthcare system, multiple congressional and federal
investigations into Trump's campaign ties with Russia have cast
a shadow over his first six months in office.
    Trump's son-in-law, Jared Kushner, on Monday told Senate
investigators he had no part in any Kremlin attempt to meddle in
the U.S. election despite having met Russians four times last
year.             
    "Gold will remain supported in the short term by a weaker
dollar and safe-haven buying," said OCBC analyst Barnbas Gan.
    Gold is often seen as an alternative investment during times
of political and financial uncertainty.
    "Spot gold may test a support at $1,250 per ounce, a break
below which could open the way towards the next support at
$1,239," according to Reuters technical analyst Wang Tao. 
            
    Silver prices        climbed as much as 0.1 percent to
$16.46 per ounce, after hitting their highest since July 3 at
$16.59 on Monday.
    Platinum        gained up about 1 percent to $934.60 per
ounce. In the previous session, it hit its highest in more than
five weeks at $940.40 an ounce. Palladium        advanced 0.8
percent to $854.90 per ounce.

 (Reporting by Nithin Prasad and Arpan Varghese in Bengaluru;
Editing by Richard Pullin and Sherry Jacob-Phillips)
  
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