BENGALURU: Gold prices were firm on Wednesday, supported by expectations of fewer rate hikes by the U.S. Federal Reserve next year, while palladium traded at a premium to the yellow metal.
Spot palladium was up 0.3 percent at $1,246.72 per ounce, as of 0441 GMT, having climbed 2 percent in the previous session after China agreed to cut tariffs on U.S.-built cars and auto parts to 15 percent from the current 40 percent.
Spot gold was up 0.1 percent at $1,243.60 per ounce, while U.S. gold futures rose 0.2 percent to $1,249.8 per ounce.
Gold is moving sideways given the uncertainties around the pace of Fed rate hikes, the Brexit deal and U.S-China trade talks, said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
The Fed is widely expected to raise rates at its Dec. 18-19 meeting, but the market is focusing on how much further it might lift rates next year, after recent comments by Fed members to decide the monetary policy based on data have been taken as a signal for lower rate hikes in 2019.
Investors also kept a close eye on developments surrounding Brexit as an attempt to oust British Prime Minister Theresa May by her conservative party gathered pace on Tuesday, after a Brexit deal vote was postponed.
"In ETFs (exchange-traded funds), we have seen positive flows into gold, these are some of the indication that perhaps the safe-haven status of gold is back," said GoldSilver Central's Lan, adding that gold prices could be testing $1,260 into year-end.
Indicative of investor sentiment toward the bullion, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.43 percent to 763.56 tonnes on Tuesday, the highest since late August.
"We are very close to the 200-day moving average at $1,255... It seems to be capping gold for the time being," said a Hong Kong-based trader.
Spot gold is biased to retest a resistance at $1,253 per ounce, a break above which could lead to a gain into a range of $1,258-$1,266, according to Reuters technical analyst Wang Tao.
Among other precious metals, spot silver was up 0.3 percent at $14.57 per ounce, while platinum was 0.1 percent higher at $782.40 per ounce.
Comments
Comments are closed for this article.