Gold steadies as investors brace for key cenbank verdicts

By Brijesh Patel

(Reuters) – Gold was little changed on Monday as investors stayed on the sidelines, positioning for a series of key central bank policy meetings this week, with the U.S. Federal Reserve widely expected to hit pause on interest rate hikes.

Spot gold was flat at $1,923.40 per ounce by 09:59 a.m. EDT (1359 GMT). U.S. gold futures were down 0.1% at $1,944.10.

“The market is becoming very focused on central bank requisitions… the expectations are that they (Fed) will push the higher for longer narrative and that should keep investors concerned,” said Edward Moya, senior market analyst at OANDA.

The Fed’s policy decision is due on Wednesday, with traders pricing in a 99% chance of the central bank keeping interest rates steady in the 5.25% to 5.5% range, according to CME’s FedWatch Tool.

The Bank of England is seen raising rates by 25 basis points to 5.5% on Thursday. The Bank of Japan’s meeting is on Friday, with investors seeking more cues on outlook from Governor Kazuo Ueda after recent comments on ending negative rates.

Non-yielding gold tends to fall out of favour among investors when interest rates rise.

Keeping gold gains in check, the U.S. dollar hovered near a six-month high against its rivals, while benchmark 10-year U.S. Treasury yields stay elevated near a multi-year peak.

Chinese gold prices hit record highs last week, extending a months-long rally as consumers snap up the safe-haven asset to offset a depreciating yuan. Physical gold premiums also soared to new highs.

“While the developments in China are worth watching, we currently do not believe that this will change the outlook for the gold market,” said Julius Baer analyst Carsten Menke.

Spot silver was steady at $23 per ounce, platinum gained 0.5% to $930.09, while palladium slipped 1.3% to $1,232.55.

(Reporting by Brijesh Patel and Anjana Anil in Bengaluru; Editing by Krishna Chandra Eluri)