Gold prices were steady on Wednesday, see-sawing in a narrow range as a weaker dollar and trade tensions provided support but investor anticipation of a US rate hike from the Federal Reserve next week weighed on prices. Spot gold was flat at $1,295.80 per ounce by 1:50 p.m. ET (17:50 GMT). US gold futures for August delivery settled down 80 cents, or 0.1 percent, at $1,301.40 per ounce.
"Investors are sitting on the fence, they only want to be involved when we break out of the range," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. Gold was trapped between a ceiling at the 200-day moving average at around $1,308 and $1,286 on the downside, he added.
The case for hiking US interest rates next week was bolstered on Tuesday by upbeat US data. Gold, a non-interest-paying asset, could see demand take a hit from higher rates. Traders said a rate hike could boost the dollar, which would pressure gold. "Strength in the dollar index could push the gold price back toward the $1,280 mark," said ThinkMarkets chief market analyst Naeem Aslam.
On Wednesday, a softer greenback supported dollar-denominated gold after the euro rose to a 10-day high when European Central Bank officials said an end to the bank's bond-buying program by the end of 2018 was plausible. Potential gold investors were waiting to see how trade tensions play out since many believe recent US tariffs are negotiating tactics, analysts said.
Silver gained 1.2 percent to $16.65 per ounce, earlier hitting $16.74, its highest since May 14. Platinum added 0.2 percent to $902 an ounce and palladium gained 2.2 percent at $1,015.75, earlier climbing to a six-week high of $1,024.90.
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