March 19, 2018 / 11:07 AM / in a month

PRECIOUS-Gold bounces from 2-week low on buying ahead of Fed meeting

    * Gold turns positive after stocks slide
    * Investors await Fed forward policy guidance
    * Platinum touches lowest in more than 2 months

 (Recasts; updates prices, headline; adds comment, additional
byline, NEW YORK to dateline)
    By Renita D. Young and Eric Onstad
    NEW YORK/LONDON, March 19 (Reuters) - Gold prices turned
positive on weakness in equity markets after touching their
lowest in more than two weeks on Monday ahead of a U.S. central
bank meeting that could raise interest rates and signal three
more increases this year.
    Global equities were stuck in their worst run since
November. U.S. stocks slid after Facebook shares sank after
reports that its user data was misused led to concerns over
broader privacy violations, sparking a sell-off in technology
stocks.                              
    "In gold we're seeing mostly buying on the dip in equities
and the fact that traders do believe that the market has priced
in a quarter-point increase from the Fed in interest rates,"
said Bob Haberkorn, senior market strategist at RJO Futures.
    Spot gold        gained 0.3 percent at $1,317.49 per ounce
by 1:33 p.m. EST (1733 GMT), having earlier dropped to
$1,307.51, its lowest since March 1.
    U.S. gold futures         for April delivery settled up
$5.50, or 0.4 percent, at $1,317.80 per ounce. 
    Non interest-bearing gold is highly sensitive to rising U.S.
interest rates, because it becomes less attractive than assets
that bear interest. 
    The price of gold has bounced after each of the five
previous U.S. rate hikes and is expected to again, traders said,
citing geopolitical risks, uncertainty over an impending trade
war and current U.S. debt levels.
    The two-day Federal Open Market Committee (FOMC) meeting
begins on Tuesday, with the U.S. Federal Reserve expected to
raise interest rates for the first time this year on Wednesday. 
     
    With an increase of 25 basis points seen as a done deal, one
key focus is whether Fed policymakers forecast four rate hikes
this year instead of the three projected at the December
meeting.                
    "I think the overall economic recovery is good enough for
the (U.S.) central bank to consider a faster pace of
normalization of monetary policies," said Mark To, head of
research at Hong Kong's Wing Fung Financial Group.
    Among other precious metals, silver        shed 0.1 percent
at $16.29 an ounce.
    While speculators have pulled back from U.S. futures in both
gold and silver, investors in exchange-traded funds have
regarded the low prices as a buying opportunity, Commerzbank
said.
    "In our opinion, market participants are positioned too
pessimistically in silver, so we expect the silver price to
recover," the German bank said in a note. 
    Palladium        dropped 0.6 percent at $988.50 per ounce,
while platinum        gained 0.9 percent at $951.70, after
touching its lowest since Jan. 3 at $936.50.

 (Additional reporting by Eileen Soreng in Bengaluru
Editing by David Goodman and Tom Brown)
  
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