Zimpapers Logo

Bengaluru. — Gold held steady yesterday, after slipping in the previous session, as investors awaited cues on the US Federal Reserve’s rate increase stance from the minutes of its last meeting. Federal funds futures suggested traders saw about a 79 percent chance that the US central bank would raise key short-term rates by a quarter point to 1 percent-1,25 percent at its June 13-14 policy meeting, little changed from Monday’s close, CME Group’s FedWatch program showed.

Spot gold was nearly flat at $1 251,29 per ounce, as of 4.34am GMT. US gold futures shed 0,3 percent to $1 251,20 per ounce.

“My expectations are that the pace of interest rate hikes will be kept steady and stable regardless of the short-term fluctuations in the US economic data,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.

“I think it is a good thing because it takes sometime for the central bank and the market to build up some sort of consensus upon which we can have some stability.”

Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding nonyielding bullion.

A US interest rate increase in June was a “distinct possibility”, the head of the Federal Reserve Bank of Philadelphia Patrick Harker said.

Meanwhile, Minneapolis Federal Reserve Bank president Neel Kashkari said while the US economy was closer now than it was in March to full employment, he still did not know “if we are there yet”. — Reuters.