Gold dipped slightly in Asia on Friday with markets poised to react to any cues on monetary policy from the Fed or European Central bank chiefs later in the day.Gold futures for December delivery on the Comex division of the New York Mercantile Exchange fell 0.01% to $1,291.94 a troy ounce.
Overnight, gold prices were flat amid thin trading volumes as market participants awaited clues on monetary policy from a central banking symposium in Jackson Hall which got underway on Thursday.
Gold traded in a narrow $6 range, as traders appeared to keep their powder dry ahead of key speeches by European Central Bank president Mario Draghi and Federal Reserve chair Janet Yellen.Draghi, however, is not expected to offer much insight into the European Central Bank’s thinking on monetary policy but traders are expected to parse Yellen’s comments to gauge the Fed’s sentiment on a third rate hike later this year.Analyst expectations have turned lower for a third rate hike in December, following the release of the Fed’s minutes last week showing that policymakers remained concerned with the slow pace of inflation.
“Yes the Fed may hike in December and yes the ECB may announce a further taper for 2018 in October but recent events (softer inﬂation, softer market sentiment and the strong Euro for the ECB) may mean that now might not be the time they choose to guide markets towards such an outcome”. Analysts at Deutsche Bank (DE:DBKGn) said.
According to investing.com’s fed rate monitor just over 30% of traders expect the fed to hike rates in December, compared to nearly 50% in the prior week. Gold is sensitive to moves higher in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
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