June 19 (Reuters) – Gold prices were little changed on
Monday, as the dollar held firm and investors assessed the path
ahead for interest rates after the U.S. Federal Reserve’s
hawkish tone.
FUNDAMENTALS
* Spot gold was flat at $1,956.93 per ounce by 0042
GMT. U.S. gold futures fell 0.1% to $1,969.20.
* The dollar index held firm, making bullion less appealing
for buyers holding other currencies.
* Fed officials struck a hawkish tone in their first
comments since the central bank held the policy interest rate
steady at its meeting last week, but signalled that rate hikes
would likely resume.
* Inflation in key parts of the U.S. service industry
“remains elevated and has not shown signs of easing,” the Fed
said in its latest monetary policy report to Congress.
* Gold is considered a hedge against inflation, but interest
rate hikes raise the opportunity cost of holding non-yielding
bullion.
* Traders are now pricing in an about 72% chance of Fed rate
hike in July, according to the CME Fedwatch tool.
* Asian shares started cautiously after their best weekly
run in five months, as investors looked ahead to China’s rate
decision and Fed Chair Jerome Powell’s testimonies for clues on
the rate path ahead.
* A few months ago, most investors feared having too much
exposure to equities. Now many are worried that they might not
have enough.
* SPDR Gold Trust GLD, the world’s largest gold-backed
exchange-traded fund, said its holdings rose 0.47% to 934.03
tonnes on Friday from 929.70 tonnes on Thursday.
* U.S. stock markets will be closed on Monday for the
Juneteenth holiday.
* Spot silver fell 0.3% to $24.0799 per ounce,
platinum eased 0.3% to $978.63, and palladium
ticked down 0.1% to $1,409.06.
DATA/EVENTS (GMT)
UK House Price Rightmove M/M, Y/Y June
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Rashmi
Aich)
