June 11, 2018 / 10:15 AM / 3 months ago

REFILE-PRECIOUS-Gold steady ahead of Fed meeting and U.S.-N.Korea summit

 (Fixes typo in headline)
    * Silver touches seven-week high
    * Platinum hits one-week high
    * SPDR holdings fall to lowest since Feb. 22

    By Eric Onstad
    LONDON, June 11 (Reuters) - Gold was barely changed on
Monday, as investors were uncertain whether the U.S. central
bank would signal a tighter future monetary policy at a meeting
this week that is expected to boost interest rates.
    Spot gold        was up 0.2 percent at $1,300.16 per ounce
at 1345 GMT, drifting between positive and negative territory
during the session.  
    U.S. gold futures         for August delivery added 0.1
percent to $1,304.50 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 this week, seeking to sustain the second-longest
U.S. expansion on record while continuing to edge rates higher.
            
    "Everybody's on the sidelines, waiting for the outcome of
the Fed meeting. There's a tug of war on views on what kind of
message the Fed will put out," said Gianclaudio Torlizzi,
partner at consultancy T-Commodity in Milan.
    "My personal view is that the Fed will surprise with a
hawkish mode, which will see a spike in the dollar and produce a
brief but deep sell-off of precious metals."
    That would open up an opportunity for investors to go long
in gold since a seasonal rally is expected over the summer,
Torlizzi added.
    The dollar index       , which measures the greenback
against a basket of six major currencies, rose 0.1 percent.
          
    Also weighing on gold were encouraging signs from U.S.
President Donald Trump about a summit with North Korean leader
Kim Jong Un in Singapore, dimming gold's safe haven attraction.
    Trump said Tuesday's summit could "work out very nicely" as
officials from both countries met to narrow differences on how
to end a nuclear stand-off on the Korean peninsula.             
    "The market opened predictably quiet ahead of the abundance
of risk events this week and wholly ignored President Trump
going rogue at the G7," Stephen Innes, APAC trading head at
OANDA said, adding that with geopolitical risk moderating, it
would be the Fed and ECB that would guide gold's near-term fate.
    Trump threw the G7's efforts to show a united front into
disarray at the weekend.             
    In additional to the Fed's decision due on Wednesday, the
European Central Bank (ECB) and Bank of Japan also have policy
meetings this week. 
    Holdings of SPDR Gold Trust      , the world's largest
gold-backed exchange-traded fund, fell 0.46 percent to 828.76
tonnes on Friday, the lowest since Feb. 22.          
    In other precious metals, silver        gained 0.8 percent
to $16.87 an ounce, after hitting a seven-week high of $16.93
earlier in the session. 
    Palladium        climbed 0.9 percent to $1,023.50 an ounce,
while platinum        rose 0.7 percent to $908 an ounce. It
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. 

 (Additional reporting by Karen Rodrigues in Bengaluru; Editing
by Jason Neely and Mark Potter)
  
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