Gold edged lower in a narrow intraday range on Wednesday morning ahead of the release of the minutes of the previous FOMC meeting, which should shed light on the US central bank’s current thinking on rate rises.
The spot gold price was last at $1,207.50/1,208.50 per ounce, down $1.10 on Tuesday’s close. Trade has ranged from $1,203.30 to $1,209.80 so far.
The gold price fell for the first time in five days on Tuesday after positive US housing data boosted the dollar. April building permits at 1.14 million beat the forecast 1.06 million and housing starts rose to 1.135 million from 0.93 million in March, beating the expected 1.02 million.
“A firmer dollar is once again acting as a headwind on precious metals but we would expect dips to find support – investors may still be in need of some safe havens before long, either because of Greece or while equities correct,” FastMarkets head of research William Adams said.
The euro was last 0.3 percent weaker against the dollar at 1.1116, which also reflects concerns about how long Greece will be able to remain a member of the eurozone given its parlous financial state.
Athens will miss its next repayment to the IMF of 305 million euros, due on June 5, if it fails to reach a deal with its lenders to unlock some bailout funds by that date, it has warned.
Market participants are also awaiting the minutes of the FOMC’s April meeting, which are scheduled for release tonight. These will be scrutinised for any change in language that could indicate a shift towards a more hawkish or dovish stance.
The members of the Fed’s policy board are locked in what has become an increasingly public debate on when will be the right time to raise interest rates, which have been near zero since December 2008.
At its last meeting, the Fed policy board 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.
“We expect the metal to be heavily influenced by directional activity in the USD,” MKS said. “It will be interesting to see what happens the next few days with more dovish themes expected from the Fed minutes today and low expectations for CPI on Friday, which prompt a bit of a sell-off in USD.”
In data today, Japan’s preliminary GDP rose 0.6 percent from 0.4 percent previously. From the eurozone, the German PPI was as expected at 0.1 percent.
In the other precious metals, silver was little changed at $17.09/17.14 per ounce as was platinum at $1,150/1,159. Palladium at $781/786 was up $6.
(Additional reporting by Dalton Barker, editing by Mark Shaw)
The post Gold price steady, Greece and FOMC minutes in focus appeared first on The Bullion Desk.
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