June 11, 2018 / 6:30 PM / 4 months ago

PRECIOUS-Gold slightly higher ahead of Fed meeting, U.S.-N.Korea summit

 (Updates prices, adds analyst comment, adds NEW YORK to
dateline)
    * Silver touches seven-week high
    * Platinum hits one-week high

    By Renita D. Young and Eric Onstad
    NEW YORK/LONDON, June 11 (Reuters) - Gold inched higher on
Monday, as investors anticipated the U.S. central bank monetary
policy meeting this week that is expected to boost interest
rates, and ahead of a U.S.-North Korea summit.
    Spot gold        gained 0.1 percent to $1,299.83 ounce by
1:46 p.m. EDT (1746 GMT). 
    U.S. gold futures         for August delivery settled up 50
cents, or 0.04 percent, at $1,303.20 per ounce. 
    The U.S. Federal Reserve will likely raise its target
interest rate to above the rate of inflation for the first time
in a decade, seeking to sustain the second-longest U.S.
expansion on record while continuing to edge rates higher.
            
    Higher interest rates dent the appeal of non-interest
bearing assets like gold. Yet gold climbed higher.
    "With the geopolitical risk with North Korea and the Fed
rate hike being baked into the market, there’s really no
downside potential for gold. Only upside potential if something
doesn’t dust the market," said Walter Pehowich, executive vice
president of investment services at Dillon Gage Metals.
    The dollar index        was steady against a basket of major
currencies.           
    Weighing on gold were encouraging signs from U.S. President
Donald Trump about a summit with North Korean leader Kim Jong Un
in Singapore on denuclearization efforts, dimming gold's safe
haven attraction.             
    "The market opened predictably quiet ahead of the abundance
of risk events this week and wholly ignored President Trump
going rogue at the G7," said Stephen Innes, APAC trading head at
OANDA, adding that with geopolitical risk moderating, the Fed
and the European Central Bank (ECB) would guide gold's near-term
fate.            
    The ECB and Bank of Japan also have policy meetings this
week. 
    Meanwhile, silver        gained 0.8 percent to $16.87 an
ounce, after hitting a seven-week high of $16.95 earlier in the
session. 
    Palladium        climbed 0.7 percent to $1,021.47 an ounce,
while platinum        rose 0.3 percent to $904.10. Platinum
touched a one-week high of $910.50 earlier in the session.
    Platinum group metals, used for catalytic converters in
vehicles, were supported by data showing Chinese automobile
sales in May were up 9.6 percent from a year earlier.
            
    "The good figures helped ensure that palladium remains
firmly above the $1,000 per troy ounce mark," Commerzbank said
in a note. 

 (Reporting by Renita D. Young in New York and Eric Onstad in
London
Additional reporting by Karen Rodrigues in Bengaluru
Editing by Mark Potter and Matthew Lewis)
  
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