Gold steadies as firmer dollar counters ME tensions
NEW YORK: Gold prices steadied on Tuesday as a stronger dollar offset safe-haven demand driven by Iran-Israel tensions, while silver surged to a 13-year high. Spot gold was little changed at $3,385.82 an ounce as of 10:58 am EDT (1458 GMT). US gold futures fell 0.4% to $3,404.60. The US dollar index firmed 0.3%, making dollar-priced bullion more expensive for other currency holders.
'Prices are seeing some consolidation for now as we await the Fed decision and watch developments in the Middle East conflict,' said Jim Wycoff, senior analyst at Kitco Metals. US President Donald Trump said that he wanted a 'real end' to the nuclear dispute with Iran, and indicated he may send senior American officials to meet with the Islamic Republic as the Israel-Iran air war raged for a fifth day. Elsewhere, the Federal Reserve will announce its policy decision on Wednesday, followed by Chair Jerome Powell's press conference.
The US central bank is widely anticipated to leave its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December. A low interest rate environment and geopolitical uncertainty tend to boost gold's appeal.
Central banks around the world expect their gold holdings as a proportion of their reserves to increase over the next five years, a survey by the World Gold Council showed. Data showed that US retail sales dropped more than expected in May, but consumer spending remained supported by solid wage growth.
Spot silver gained 2.3% to $37.16 per ounce, reaching its highest level since February 2012. Citi in a note said silver could rise to $40 over the next six to 12 months.
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