Gold steady on Fed rate pause hopes, stronger equities
By Karthika Suresh Namboothiri
BENGALURU (Reuters) - Gold prices held steady on Tuesday, supported by market expectations of fewer interest rate hikes in the year by the U.S. Federal Reserve, while a bounce in Chinese equities stoked interest in riskier assets.
Spot gold had edged down about 0.1 percent to $1,289.86 per ounce by 0748 GMT, while U.S. gold futures were 0.1 percent lower at $1,290.50 an ounce.
"We will see market resistance until we see some catalyst that will give some boost to safe-haven assets," said Kyle Rodda, a market analyst at IG, Australia.
"Markets are sitting on their hands and waiting for more information about the subjects that matter to them."
Asian stocks recovered on Tuesday after Beijing signalled more supportive measures to stabilise a slowing economy, and emphasised that China is seeking a strong start in the first quarter. [MKTS/GLOB]
Meanwhile, the dollar weakened on heightened expectations the Fed will hold off on raising rates this year due to a slowdown in global growth. [USD/]
"The Fed had said earlier they would raise interest rates based on data ... So, the weaker economic data has supported gold prices," said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
If gold can break the $1,298 level, $1,300 would not be difficult to achieve, Lan added.
Gold tends to gain on expectations of lower interest rates, as they reduce the opportunity cost of holding non-yielding bullion. Lower interest rates also tend to weigh on U.S. yields and the dollar, in which gold is priced.
Spot gold looks neutral in a range of $1,285-$1,299 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.
Markets will be keenly looking out for any progress in Brexit negotiations as Britain's parliament will vote on Prime Minister Theresa May's deal, which already looks set to be rejected by lawmakers.
"If anything goes wrong in today's meeting, it will be supportive of gold," said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.
Among other precious metals, palladium inched up 0.1 percent to $1,324.50 per ounce. In the previous session, the metal was trading just below its all-time high of $1,342.43 that was reached last week.
Platinum rose 0.4 percent to $803.00 per ounce, while silver gained 0.1 percent to $15.63.
(Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing by Richard Pullin and Joseph Radford)
