Gold Steady Above $1,200 as June Fed Rate Hike Unlikely

Gold held above $1,200 an ounce on Thursday as minutes from the Federal Reserve’s policy meet showed the U.S. central bank was unlikely to hike interest rates in June, in line with market expectations.

Spot gold was steady at $1,209.60 an ounce by 0658 GMT, after gaining 0.2 percent in the previous session.

Minutes of the Fed’s April meeting, released on Wednesday, showed policymakers believed it would be premature to hike interest rates in June, a view that is already widely held in the market following disappointing U.S. economic data.

The minutes showed Fed officials pushing the prospect of a rate hike later into the year. “Gold will benefit from the Fed’s decision to postpone their rate hike and the bar for gold’s support level look to be raised from here,” said Howie Lee, an analyst at Phillip Futures.

Rising rates tend to weigh on gold because they increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.

via Reuters

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