Gold slips as rate cut expectations ease ahead of Fed meet
* Spot gold may retest a support at $1,337/oz- technicals
* U.S. Federal Reserve to meet June 18-19
* Platinum dips to over 2-wk low of $787/oz
By Karthika Suresh Namboothiri
June 17 (Reuters) - Gold prices slipped further on Monday
after sliding from a more-than-14-month high the previous
session on upbeat U.S. economic data that dampened expectations
the Federal Reserve could ease interest rates.
Spot gold edged 0.2% lower to $1,338.90 per ounce at
1:34 p.m. EDT (1734 GMT). Prices had surged to $1,358.04 on
Friday, the highest since April 11, 2018.
U.S. gold futures settled 0.1% lower at $1,342.90
"We had some very good retail sales and some very good
industrial production figures come out on Friday," said Jeffrey
Christian, managing partner of CPM Group. "What we are seeing
today is some pullback from excessive bullishness last week,
because of expectations the Fed might lower interest rates."
Above-forecast U.S. industrial output data and upbeat retail
sales and consumer confidence readings on Friday pushed back
futures markets expectations of any quick rate cut by the U.S.
Expectations of a rate cut at the Fed's June 18-19 meeting
fell to 21.7% from 28.3% on Thursday after the retail data,
according to CME Group's FedWatch tool. But bets for monetary
easing at the July meeting remained at 85%.
By Monday, expectations for easing had edged lower.
Investors also look towards a G20 summit later this month
where U.S. President Donald Trump will likely meet Chinese
President Xi Jinping amid their drawn-out trade spat that has
ruffled markets since its conception last year.
Concerns persist that the bitter trade war could drive world
economies into recession.
"There are so many moving pieces I think a lot of people are
looking at both the FOMC (Federal Open Market Committee), and
the G20 and saying 'I really don't know how this is going to
shape out'," CPM Group's Christian said.
Holdings of SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, rose 0.6% to 764.10 tonnes on
Friday from 759.70 tonnes on Thursday.
"Safe-haven flows in gold continue to inflate the extreme
overbought positioning in gold with more than $4.4 billion
entering the gold market over the week. Most of this flow is due
to short covering," Societe Generale said in a note.
Spot gold may retest a support at $1,337 per ounce, a break
below which could cause a loss to $1,324, according to Reuters
technical analyst Wang Tao.
Other precious metals traded lower as well, with spot silver
falling 0.3% to $14.82 per ounce, and palladium
declining 0.4% to $1,459.01.
Platinum dipped to its lowest since May 31, down 0.8%
at $793.75 per ounce.
(Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing
by Andrea Ricci and Cynthia Osterman)
First Published: 2019-06-17 03:40:55
Updated 2019-06-17 19:44:55
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