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27/04/2015 07:20 AST
Gold was languishing near its lowest in five weeks on Monday, as robust equities dented
its appeal as a safe-haven, with investors also focusing on the Federal Reserve's policy meeting this week for clues on the timing of a U.S. rate hike.
Spot gold had ticked up 0.3 percent to $1,182.70 an
ounce by 0342 GMT. But it failed to make much progress beyond
its lowest since March 20 at $1,174.73, reached on Friday as
global equities climbed to all-time highs.
Bullion was also weighed down by uncertainty over when the
Fed would begin to hike rates. Market expectations have been for
a June rate hike, but recent soft economic data has stoked
speculation that the U.S. central bank could delay the move to
September.
The Fed will kick off a two-day policy meet on Tuesday, with
investors watching out for comments on the strength of the
economy and the timing of monetary tightening.
"The prospect for a less than hawkish change to the FOMC
statement would likely remove some of the near-term pressure
that has been baked into the gold price," said HSBC analyst
James Steel, referring to the Federal Open Market Committee.
However, this is unlikely to mean more upside for bullion,
as expectations for an eventual hike in rates are likely to keep
a lid on prices, Steel said.
Investors believe a rate hike could dent demand for gold, a
non-interest-paying asset.
In the wider markets, the dollar started the week on the
defensive after more disappointing U.S. economic data reinforced
expectations the Fed would not hike interest rates soon.
Asian shares scaled seven-year highs following stellar
earnings from a few U.S. hi-tech giants.
Gold is usually seen as a safe-haven asset and tends to do
well when riskier assets such as equities underperform.
Traders also continued to follow Greece's negotiations with
its creditors.
After no deal was reached between Greece and euro zone
finance ministers in their meeting on Friday, German Finance
Minister Wolfgang Schaeuble hinted on Saturday that Berlin was
preparing for a possible Greek default.
A Greek default or a potential exit from the euro zone could
cause ripples in the global markets, and boost haven bids for
gold.
Reuters
Ticker | Price | Volume |
---|---|---|
SABIC | 114.77 | 5,915,941 |
(In US Dollar) | Change | Change(%) | |
---|---|---|---|
Gold | 1,332.2 | -8.6 | -0.64 |
Silver | 16.4 | -0.21 | -1.23 |
Platinum | 923 | -9 | -0.97 |
Palladium | 929 | -3 | -0.32 |
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