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Gold Slip Near 4-Week High Ahead of Fed Meeting

Gold Slip Near 4-Week High Ahead of Fed Meeting

Gold Silver Reports — Gold inched down on Tuesday but stayed near a four-week high touched in the previous session as investors waited for clues from a two-day U.S. Federal Reserve meeting beginning later in the day and Britain’s June 23 vote on whether to leave the European Union.

Spot gold was down 0.3 percent at $1,279.35 an ounce as of 0354 GMT. Bullion, which has gained more than 5 percent this month, touched a peak of $1,287.0 on Monday, its highest since May 16.

U.S. gold fell 0.3 percent to $1,282.80.

“I think investors have decided to take profits and some of them are staying on the sidelines before taking a decision on what to do next until the Fed makes an announcement,” said Brian Lan, managing director at Singapore-based gold dealer Gold-Silver Central.

The bullion, which is often perceived as a hedge against economic and financial uncertainty, has been driven by rising investor risk aversion before key central bank meetings this week.

Apart from the Fed, the Bank of England, Swiss National Bank and the Bank of Japan will meet this week, and are expected to hold monetary policies steady against a backdrop of caution about the global economic reports.

The safe-haven appeal of gold could get a further boost if a vote by Britain to leave the 28-member group, dubbed “Brexit,” pushes Europe back into a recession.

Britain’s “Out” campaign widened its lead over the “In” camp ahead of the country’s June 23 referendum, according to two opinion polls published by ICM on Monday.

“We think that the risk of Britain leaving has now increased substantially and the Fed will therefore signal its willingness in no uncertain terms to ‘stay the course’ in light of this potential ‘Black Swan’ event,” INTL FCStone analyst Edward Meir said in a note.

“This will likely enable gold to push even higher over the next few days, at least until the polls start to swing the other way.”

The British pound remained fragile near a two-month low against the dollar, while Asian stocks slipped on Tuesday on concerns ahead of the referendum in Britain. Gold priced in pound touched its highest since September 2013 on Monday.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.27 percent to 896.30 tonnes on Monday, the highest since October 2013.

Spot silver fell 1 percent to $17.26 per ounce, after touching a one-month high of $17.45 on Monday. Platinum was down 0.1 percent at $984.25 per ounce and Palladium fell 0.1 percent to $539.56 per ounce. – Neal Bhai Reports

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