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LONDON. — A weaker dollar helped gold prices to edge higher yesterday, but gains were limited as the market waited for clues on the pace of US interest rate rises from a meeting of the Federal Reserve next week. Spot gold was up 0,1 percent at $1 297,24 an ounce by 1407 GMT, while US gold futures for August delivery were flat at $1 301,30.

“The rise in prices is due to the dollar,” said Capital Economics analyst Simona Gambarini. (USD)
A weaker dollar is good for gold because it makes the metal cheaper for buyers using other currencies and can fuel demand.
However, Gambarini said investors were in wait-and-see mode ahead of the Fed meeting on June 12-13, when they expect both a rate rise and signals on the outlook for U.S. monetary policy.

Interest rates are important for gold because higher rates tend to boost the dollar and also push up bond yields, reducing the appeal of non-yielding bullion.

Expectations that the Fed will push ahead with several rate hikes this year were fuelled on Thursday by US data showing an unexpected fall in applications for unemployment benefits.

Gold fell from near 1-1/2 year highs around $1 350 an ounce in mid-April to below $1 300 last month as the dollar strengthened to 2018 highs, but prices steadied after the rally faltered.

As well as the Fed meeting, investors were looking ahead to a summit between the leaders of the United States and North Korea on June 12 and a European Central Bank (ECB) meeting on June 14.
Both events could affect gold. — Reuters.