Gold prices remained locked just below $1,300 an ounce on Tuesday, June 11, as investors waited for clues on the pace of U.S. interest rate rises following the impending conclusion of a Federal Reserve policymaking meeting.
A Fed statement and press conference expected from 2 p.m. EDT (1800 GMT) on Wednesday could push gold out of the tight range of about $1,290 to $1,305, in which it has been trapped since mid-May.
Gold is highly sensitive to higher interest rates, which can boost bond yields, making non-yielding bullion less attractive to investors, and could strengthen the dollar, increasing the cost of gold for buyers using other currencies.
Gold prices have tended to fall ahead of previous rate rises but recover afterwards, he said. “We’re still erring towards the potential for a move higher here.”
Spot gold dropped 0.4 percent at $1,294.96 per ounce by 1:35 p.m. EDT (1735 GMT), earlier hitting $1,292.60, a one-week low. U.S. gold futures for August delivery settled down $3.80, or 0.3 percent, at $1,299.40 per ounce.
U.S. bond yields edged higher and the dollar was slightly higher against a basket of major currencies.
Gold did not react strongly to a pledge by the leaders of the United States and North Korea to work towards complete denuclearisation of the Korean peninsula.
In other precious metals, silver lost 0.2 percent to $16.86 an ounce after matching Monday’s seven-week high of $16.95.
“If the price were to exceed the $17 mark, this could lure in further buyers and continue the price rise,” Commerzbank said in a note.
Platinum declined 1.2 percent to $893.50 per ounce and palladium dipped 0.4 percent to $1,018, Reuters reports.
