By Ashitha Shivaprasad
(Reuters) – Gold prices were stuck in a tight range on Thursday as market participants awaited further direction on U.S. rate hikes from the Federal Reserve meeting next week.
Spot gold was flat at $1,785.59 per ounce, as of 0756 GMT, after rising more than 1% on Wednesday amid a pullback in the dollar. U.S. gold futures were little changed at $1,797.30
The dollar index held steady. Weaker dollar makes gold more appealing for overseas buyers.
“Gold is likely to find it difficult to build directional momentum one way or another until the Fed meet,” said Ilya Spivak, head of global macro at Tastytrade.
“If the Fed outcome is in line with expectations, the market will be relieved that it is not worse than expected. The dollar might get weaker and this will anchor gold a bit.”
Most investors expect the Fed to deliver a 50-basis point rate hike on Dec. 13-14. Traders also await the November Consumer Price Index (CPI) report on Dec. 13.
Gold could trade in a $1,765-$1,795 range in the run-up to the Fed meeting, said OCBC FX strategist Christopher Wong, adding focus remained on how hawkish the Fed might sound.
Gold is traditionally considered an inflation hedge and safe investment during economic and geopolitical turmoil. However, high interest rates increase the opportunity cost of holding gold as it yields no interest.
The World Gold Council (WGC) said global gold ETFs (exchange traded funds) holdings fell for a seventh straight month in November, although outflows slowed to a modest 34 tonnes worth $1.8 billion.
Spot silver inched 0.2% higher to $22.76 per ounce, platinum rose 1% to $1,012.22 and palladium was up 1.3% to $1,868.00.
Graphic: xau https://fingfx.thomsonreuters.com/gfx/ce/gdvzqyzodpw/Pasted%20image%201670466878013.png
(Reporting by Ashitha Shivaprasad in Bengaluru; editing by Uttaresh.V and Subhranshu Sahu)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.