July 5, 2018 / 5:50 PM / in 3 months

PRECIOUS-Gold flat as dollar softens ahead of Fed minutes

    * Federal Reserve June minutes due at 2 p.m. EDT (1800 GMT)
    * Dollar falls to one-week low

 (Updates trading and headline; adds comment, second byline, NEW
YORK to dateline)
    By Renita D. Young and Eric Onstad
    NEW YORK/LONDON, July 5 (Reuters) - Gold was flat on
Thursday, as the U.S. dollar weakened and investors awaited the
minutes of the most recent U.S. Federal Reserve policy meeting
for clues on the pace of further interest rate hikes this year.
    Spot gold        was unchanged at $1,256.15 ounce by 1:36
p.m. EDT (1736 GMT). 
    U.S. gold futures         for August delivery settled up
$5.30, or 0.4 percent, at $1,258.80 per ounce. 
    The dollar index         fell to its lowest level in more
than a week while the euro climbed half a percent to near
three-week highs following strong German data.                
    "The dollar’s down, giving some support to precious metals,"
said Chris Gaffney, president of world markets at TIAA Bank. 
    "But the Fed minutes are what we're really waiting on to see
if members are worried we'll see an overheating...or if they're
going to talk about all the trade tensions and the negative
impact that may have over some of the numbers."
    The minutes of the U.S. central bank's June meeting are
scheduled to be published at 2 p.m. EDT (1800 GMT). During the
discussion, the Fed had projected two more rate hikes in 2018
for a total of four.                         
    Gold is sensitive to rising interest rates, as higher rates
increase the opportunity cost of holding non-yielding bullion,
while boosting the dollar, in which the metal is priced.
    The minutes may point to concerns about inflation or that
members want monetary policy to keep pace with fairly strong
economic growth, traders said.  
    Investors are also awaiting the release of non-farm payrolls
and unemployment data on Friday. 
    "One would not like to have any bullish bets on gold when
the labor market trend is strong," ThinkMarkets chief market
analyst Naeem Aslam said. 
    Physical gold demand has been lackluster in India, the
second-biggest gold consumer after China, Commerzbank said,
lending no price support.
    Meanwhile, silver        was flat at $16.05 an ounce.
    Palladium        dropped 0.1 percent to $945.50 an ounce,
while platinum        declined 0.5 percent to $836 after
touching its lowest since 2008 at $793 on Tuesday.
    "It's a speculative-driven selloff in platinum, it's not a
fundamental driven selloff," said Jonathan Butler, commodities
analyst at Mitsubishi.
    "And when we think about the fundamentals, at $800, most
South African mines are losing money. So if we maintain these
prices sub-$900, there will eventually be a supply-led
response." 

 (Additional reporting by Karen Rodrigues in Bengaluru; Editing
by Bernadette Baum)
  
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