Gold edges up ahead of central bank rate decisions
Gold prices edged up in early Asian trading on Monday, as investors awaited a key U.S. Federal Reserve meeting that could see the central bank pausing interest rate hikes after July.FUNDAMENTALS * Spot gold rose 0.051to $1,961.27 per ounce by 0049 GMT. Bullion gained nearly 0.3% last week.
* U.S. gold futures fell 0.2% to $1,963.10. * The dollar index was steady, holding near its over one-week peak hit on July 20, limiting gold's rise, as a stronger dollar makes the metal more expensive for holders of other currencies.
* This week, long with the Fed, the European Central Bank (ECB) and Bank of Japan decisions all come over the Wednesday-Friday 48-hour period. * Markets are fully priced for quarter point hikes from the Fed and ECB, so the focus will be on what Fed Chair Jerome Powell and ECB President Christine Lagarde say about the future. * Higher interest rates increase the opportunity cost of holding non-yielding bullion.
* China's Politburo meeting this week could see more stimulus announced, though investors have so far been underwhelmed by Beijing's actions. * The BOJ, however, is expected to keep its monetary and yield control policy unchanged, according to economists polled by Reuters. * Physical gold demand stalled in India in the week ending July 21, while bullion was sold at high premiums in top consumer China.
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