Gold slips more than 1% on dollar strength as Fed meeting looms
* Specifications reduced bullish positions in gold during the week ended June 8 – CFTC
* The dollar hovers near a one-week high; Fed Meeting June 15-16 (Price Updates)
June 14 (Reuters) – Gold prices fell more than 1% on Monday, weighed down by a stronger dollar and easing inflation concerns, as investors awaited information from the policy meeting of the US Federal Reserve scheduled for later this week.
Spot gold fell 1.4% to $ 1,849.98 an ounce at 12:17 p.m. GMT, after hitting its lowest level since May 17 at $ 1,848.49. US gold futures fell 1.4% to $ 1,852.50 an ounce.
Along with a stronger dollar, profit-taking is weighing on the metal, independent analyst Ross Norman said, adding that the market saw pound volume line up ahead of the June 15-16 Fed meeting.
“What really matters is how well the Fed is going to focus on the immediate problem, which is probably inflation, or the longer term problem, which is going to decrease,” Norman said.
The dollar was little changed after posting its biggest weekly gain in six weeks.
Data last week showed a sharp rise in consumer prices in the United States in May. But Fed officials have repeatedly said inflation will be transient.
Gold is traditionally seen as a hedge against inflation that can be triggered by widespread stimulus measures.
“The Fed is expected to leave its policy unchanged and once again downplay discussions on typing it,” ING analysts said in a note.
“Nonetheless, markets will be looking for clues as to whether the Fed is starting to recognize that inflation may not be as transient as previously thought. A technical adjustment to deal with the rapid build-up of excess liquidity is certainly possible, but the downside risks to the dollar remain. “
Speculators reduced their net long positions in COMEX gold during the week ended June 8 and increased their net long positions in silver.
Elsewhere, silver fell 1.1% to $ 27.59 an ounce, palladium fell 1% to $ 2,749.01, and platinum fell 0.4% to $ 1,145.95 . (Reporting by Arundhati Sarkar in Bangalore; Editing by Subhranshu Sahu and Bernadette Baum)
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