LONDON. — Gold was barely changed yesterday, as investors were uncertain whether the US 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.
US gold futures for August delivery added 0,1 percent to $1,304.50 per ounce. The US 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 US 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 US President Donald Trump about a summit with North Korean leader Kim Jong Un in Singapore, dimming gold’s safe haven attraction. — Reuters.