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Gold prices hold tight ranges ahead of likely Fed rate pause

Monday,   18-Sep-2023   08:27 AM (IST)

Gold prices were flat on Monday as investors continued to price in a pause in interest rate hikes by the Federal Reserve at their policy meeting this week with a focus on the U.S central bank’s rate outlook. Spot gold was listless at $1,924.29 per ounce by 0056 GMT. U.S. gold futures steadied at $1,946.10.  Asian shares started trade cautiously on Monday in a week packed with central bank meetings, which will be closely scrutinised for the global interest rate outlook. Faster growth, cooler inflation and a job market that won’t quit have set the stage for an updated batch of forecasts from Fed officials this week likely to reflect their growing faith in prospects for an economic soft landing. The Bank of England is likely to hike interest rates once again this week, possibly the last hurrah for one of the great tightening cycles of the last 100 years as a cooling economy begins to worry policymakers. The Bank of Japan’s policy meeting on Friday is the highlight of the week in Asia. U.S. manufacturing output barely rose in August amid a decline in motor vehicle production, and activity could contract in the months ahead after the United Auto Workers (UAW) union embarked on strikes at three factories on Friday. 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 a new highs amid a lack of fresh import quotas. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.1% to 880.27 tonnes on Friday. COMEX gold speculators cut net long position by 16,544 contracts to 49,796 in week ended Sept. 12, data showed on Friday. Elsewhere, spot silver rose 0.3% to $23.07 per ounce, platinum gained 0.2% to $927.29 and palladium was flat at $1,248.73.