Gold firms on dip in dollar, upcoming Fed meet pivotal

·2-min read
FILE PHOTO: Gold bars and coins are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich

By Bharat Gautam

(Reuters) - Gold prices rose on Monday as the dollar eased and equities pared gains, with the focus now on the U.S. Federal Reserve timetable for a rollback in stimulus measures at a key meeting this week.

Spot gold was up 0.6% at $1,793.30 per ounce at 11:00 a.m. EDT (1500 GMT), U.S. gold futures for December delivery gained 0.6% to $1,794.10.

"It is mostly a dollar move," said Edward Moya, senior market analyst at brokerage OANDA.

"You're going to see limited positioning leading up to the Fed, but right now some bullish signals will merge for gold and that's ultimately going to help gold in the long term."

U.S. equities, whose strong performance Moya said has dampened demand for safe-haven gold, pared some gains on Monday. [.N][MKTS/GLOB]

The dollar index dipped slightly against its rivals, making gold more appealing to holders of other currencies.[USD/]

The U.S. Federal Reserve, which concludes a two-day meeting on Wednesday, is expected to say it will start to roll back bond purchases, a sign that it sees the U.S. economy recovering, though the focus is on clues about rates lift-off.

"We need some fresh air coming into markets and this week's Fed meeting could be such an event... until then the market will be drifting," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of holding non-interest bearing gold.

The retail physical market is strengthening considerably in places like India and China, and although rare, that demand could be supporting gold prices as well, StoneX analyst Rhona O'Connell said. [GOL/AS]

Elsewhere, silver rose 0.8% to $24.04 per ounce.

Platinum jumped 3.8% to $1,057.00 per ounce and palladium also climbed 2.6% to $2,054.68, having risen over 3% earlier.

(Reporting by Bharat Govind Gautam and Amy Caren Daniel in Bengaluru; Editing by Shailesh Kuber)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting