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PRECIOUS-Gold steadies ahead of raft of central bank news
October 30, 2017 / 11:12 AM / in a month

PRECIOUS-Gold steadies ahead of raft of central bank news

    * U.S. Fed, Bank of England, Bank of Japan meet this week
    * Trump to announce Fed chair, with Powell tipped for post
    * GRAPHIC-2017 asset returns: tmsnrt.rs/2jvdmXl

 (Updates prices)
    By Jan Harvey
    LONDON, Oct 30 (Reuters) - Gold steadied on Monday as
traders stayed on the sidelines before this week's central bank
meetings and policy news, including President Donald Trump's
expected announcement of the next Federal Reserve chair.
    The U.S. central bank kicks off a two-day policy meeting on
Tuesday, while the Bank of Japan and Bank of England also meet
this week to discuss interest rate policy.             
    Gold is highly sensitive to rising rates, which increase the
opportunity cost of holding non-yielding bullion. Tighter U.S.
policy also boosts the dollar, in which the metal is priced.
    Spot gold        was at $1,271.59 an ounce at 1251 GMT,
little changed from its late Friday level but well off that
session's three-week low of $1,263.35. U.S. gold futures       
for December delivery were flat at $1,271.80 an ounce. 
    The metal is facing a slew of potential risks this week,
Saxo Bank analyst Ole Hansen said, including the U.S. monetary
policy meeting and Fed chair announcement, key jobs data on
Friday and ongoing unrest over Catalonia.
    "Overall you can argue that the sum of these upcoming events
is gold bearish, not least considering Friday's strong read on
(U.S.) growth," he said. "Funds cut back the net long for a
sixth week, but it was interesting that both longs and not least
short positions were cut."
    Speculators cut their bullish COMEX gold bets by 1,968
contracts to 173,043 contracts, U.S. Commodity Futures Trading
Commission (CFTC) data showed on Friday, taking them to their
lowest since early August.               
    As well as this week's monetary policy meetings, attention
is turning to prospects for the next Federal Reserve chair. Fed
governor Jerome Powell, considered a moderate, is widely tipped
to take over from Janet Yellen when she steps down in February.
                
    Trump has said he has been considering both Powell and
Stanford University economist John Taylor for the post and has
also not ruled out renominating Yellen. 
    "The front end of the U.S. rates curve doesn't seem to have
priced in a Taylor Rule Fed ... which means that a surprise
would send yields and the dollar higher, and risk assets down,"
SG Forex said in a note on Monday.
    "The market thinks Jerome Powell, more neutral in the
market's mind, is more likely."
    Among other precious metals, silver        was down 0.7
percent at $16.70 an ounce. Platinum        was 0.1 percent
higher at $915.20 an ounce, while palladium        was up 0.1
percent at $966.20.

 (Additional reporting by Vijaykumar Vedala in Bengaluru;
Editing by Louise Heavens and Edmund Blair)
  

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