Gold off two-week lows ahead of Fed meet

Gladys Abbott
March 21, 2018

Gold edged lower on Tuesday as the United States dollar firmed while traders waited to gauge the path of U.S. monetary policy for the rest of the year from the two-day Federal Reserve meeting that kicks off later in the day.

Spot gold fell for a fourth straight session and was down 0.1 per cent at $1,312.36 an ounce at 1322 GMT, having earlier dropped to $1,307.51, its lowest since March 1.

New Fed Chairman Jerome Powell sounded somewhat more hawkish than expected at last week's semi-annual monetary policy report to Congress.

Public remarks by Fed officials suggest a broad shift in the committee's outlook towards a potentially faster pace of tightening, and we expect the median dot to show four hikes in 2018, up from three at the December meeting.

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"This will likely escalate with a tit-for-tat response from China, which won't help".

The most active gold contract for April delivery went up 5.5 dollars, or 0.42 percent, to close at 1,317.8 dollars per ounce. Prices have stayed between about $1,305 and $1,360 this year, moving within that range based on swings in the dollar and investors' focus on higher interest rates.

Meanwhile, Asian shares fell after investors took profits in high-flying USA technology shares on fears of stiffer regulation as Facebook came under fire following reports it allowed improper access to user data.

Silver shed 0.4pc to $16.24 an ounce. Palladium rose 0.4 per cent to US$993.60 per ounce.

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