Gold Stalls As Dollar Holds On Fed Progressive Bets
Gold bars at Solar Capital Gold Zrt. in Budapest, Hungary, on March 10, 2016.
Akos Stiller | Bloomberg | Getty Images
Gold traded flat at the start of Asian trading on Tuesday as the dollar remained firm on expectations that the Federal Reserve will announce a cut in its bond purchases next month.
Spot gold was unchanged at $ 1,753.77 an ounce at 0123 GMT, while US gold futures were little changed at $ 1,754.90.
The dollar hovered near a year-long high reached last month amid soaring energy prices and expectations that the U.S. central bank would soon begin to normalize its policy.
Gold is seen as a hedge against inflation and currency depreciation probably as a result of the widespread stimulus. The Fed’s tapering could tackle both of these conditions, reducing the appeal of bullion.
The current inflation surge in the euro area is not a trigger for monetary policy action as growth in services prices and wages remains weak, Philip Lane, chief economist at the European Central Bank, said on Monday.
Russian company Nornickel, the world’s largest producer of palladium, has reduced its estimate of the global palladium market deficit this year and next due to the timid recovery in the auto sector, a senior executive told Reuters.
Spot silver fell 0.2% to $ 22.52 an ounce, while platinum fell 0.5% to $ 1,003.87.
Palladium fell 0.4% to $ 2,103.16, after hitting its highest level since September 10 at $ 2,182.67 on Monday.