Gold was a touch firmer in a narrow intraday range on Thursday morning, reflecting the indecision of the dollar after the minutes from the last US Federal Reserve meeting suggested an interest-rate increase is unlikely in June but gave no clue on timing beyond then.
The spot gold price was last at $1,210.80/1,211.60 per ounce, up $1.00 on Wednesday’s close and within a $5 range. MKS dealers expect support to kick in around $1,200, with initial resistance at $1,213-1,215.50.
Last night’s release of the Federal Open Market Committee (FOMC) minutes from the April 28-29 meeting effectively ruled out a rise in interest rates in June, in line with market expectations, but it gave no clue on whether a rise from near-zero levels could happen in September, December or even in 2016.
“Investors waited for fresh clues as to the timing of a rate hike in the FOMC minutes that ultimately never came,” Alex Thorndike, senior dealer at MKS, said in a note.
“The uncertainty over whether and when the Fed will raise interest rates is likely to keep the gold price in check for the time being,” analyst Carsten Fritsch of Commerzbank added.
At its previous meeting, the Fed removed all calendar references in its forward guidance and said that recent economic weakness might be “transitory” in nature. This means that bank is now entirely data dependent and a rate increase could happen at any future meeting.
The dollar has been volatile since the release of the FOMC minutes, seemingly unable to settle on a direction – it was last down slightly against the euro at 1.1167.
“The direction of the dollar is likely to set the direction for the gold price, although any negative developments over Greece could lend support,” FastMarkets analyst Will Adams said.
In data released so far this morning, the French flash manufacturing PMI was better than expected at 49.3 but the country’s flash services PMI disappointed at 51.6. Germany’s flash manufacturing PMI at 51.4 was lower than forecast, as was its flash services PMI at 52.9.
The eurozone flash manufacturing PMI was better than expected at 52.3 but its flash services PMI undershot at 53.3. The bloc’s current account was also lower than forecast at 18.6 billion euros.
Investors will now turn their attention to the US for initial jobless claims, existing home sales, the Philly Fed manufacturing index and leading indicators. As well, ECB president Mario Draghi and FOMC member Stanley Fischer are speaking.
In the other precious metals, palladium was still looking vulnerable at $775/781 per ounce, up $1, while platinum was unchanged at $1,154/1,159.
The focus remains on Platinum Week events in London this week, with most market participants still downbeat on the outlook for the PGM complex. Goldman Sachs appears to be among the most bearish, expecting platinum to end the year at $1,175 due to a much smaller deficit than expected, while palladium is seen rising to just $822.
Silver was up 10 cents at $17.19/17.23 per ounce.
(Editing by Mark Shaw)
The post Gold in narrow range, mirrors dollar hesitation after FOMC minutes appeared first on The Bullion Desk.
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