Gold price steady on soft dollar after Fed comments; Palladium near $1,550
London (Feb 27) Gold held steady on Wednesday as the dollar traded near three-week lows, after U.S. Federal Reserve Chairman Jerome Powell reiterated that the central bank will be patient in hiking interest rates, while palladium hovered near $1,550 levels.
Spot gold was down 0.1 percent at $1,327.26 per ounce as of 0741 GMT, while U.S. gold futures were flat at $1,329.
The U.S. unit against major currencies was at 96.117, after shedding 0.4 percent overnight to its lowest since Feb. 5 at 95.948.
“Gold has found very good support at $1,300, especially after the Fed’s stance,” said Mark To, head of research at Wing Fung Precious Metals in Hong Kong.
“At this moment, people have very diverse views on the course of Fed. But it is patient and more data dependent, which is going to be good for gold. $1,300- $1,400 should be very reasonable price range for this year.”
During his testimony before the U.S. Senate Banking Committee on Tuesday, Powell reiterated that the Fed will remain “patient” in deciding on further interest rate hikes.
“Expectations of positive news out of U.S.–China negotiations should see equity markets supported over the near-term and potentially weigh upon bullion,” MKS PAMP said in a note.
“However global growth concerns, the U.S.–North Korea summit and Brexit remain risk events, underpinning bullion, or at the very least providing supportive interest toward $1,320-$1,325.”
U.S. President Donald Trump and North Korean leader Kim Jong Un will try to break a stalemate over North Korea’s nuclear weapons in their second summit, to be held in Hanoi later on Wednesday.
Meanwhile, spot palladium slipped 0.5 percent to $1,551.89 per ounce, after scaling a record peak of $1,565.09 in the previous session.
The autocatalyst metal has climbed 23 percent this year on widening supply tightness in the market, while threats of strikes by mineworkers in South Africa added support to the metal.
Analysts say that though the fundamental reasons are still intact the strong rally in prices, in a very short duration, has increased risk of profit taking or correction.
Norilsk Nickel, the world’s largest palladium producer, said tighter emissions regulations in all major markets and flattish primary supply would widen a palladium deficit in 2019.
Elsewhere, silver fell 0.7 percent to $15.83 per ounce, while platinum was up 0.7 percent at $861.94 per ounce, after scaling its highest since early November at $862.5 earlier in the session.
Platinum’s boost to 3-month highs on mine strike fears is likely to be limited as widening structural surplus in the market is expected to persist for the foreseeable future, Metals Focus said in its weekly note.
Reuters
