Gold stays above $1,500 as the focus turns to Fed minutes

Bengaluru — Gold prices held steady on Wednesday after recovering to above the key $1,500 an ounce level in the previous session, with investors waiting for the minutes of the Federal Reserve’s July meeting for possible clues on further US interest rate cuts.

Spot gold slipped 0.2% to $1,503.25 an ounce by 3.44am GMT.  US gold futures were down 0.2% at $1,513.30 an ounce.

Minutes from the Federal open market committee’s most recent meeting in July, when the US central bank cut rates for the first time since the 2008 financial crisis, are due on Wednesday.

“The minutes are going to set up a foundation of what to expect, and then Jackson Hole will provide clarity as to whether the Fed is finally coming to the party with potential monetary policy support,” said IG Markets analyst Kyle Rodda.

Traders are also waiting for the US central bank’s Jackson Hole seminar later this week and a Group of Seven summit this weekend for clues on what additional steps policymakers may take to boost economic growth.

Futures are fully priced for a quarter-point cut in rates next month, and over 100 basis points of easing by the end of 2020.

Signalling a possible escalation in the trade war, US President Donald Trump said on Tuesday he had to confront China over trade even if it caused short-term harm to the US economy because Beijing had been cheating Washington for decades.

Trump’s remarks came hours before his government announced approval of a sale of fighter jets to Taiwan, a move sure to draw Beijing’s ire and further dim prospects for a quick trade deal.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.21% to 845.17 tons on Tuesday.

Spot gold may retest a support at $1,497 an ounce, a break below which could cause a fall to $1,480, according to Reuters technical analyst Wang Tao.

The dollar index, which measures the greenback’s value against a basket of six major currencies, was flat after drifting away from a three-week high hit on Monday.

Elsewhere, silver fell 0.5% to $17.04 an ounce, while platinum too was down 0.5% to $844.60. Palladium fell 0.3% to $1,486.80 an ounce.

Reuters