* Fed policy decision due on Wednesday
* COMEX gold speculators cut net long position
Sept 18 (Reuters) – Gold prices edged higher on Monday
as investors priced in a pause in interest rate hikes by the
Federal Reserve at its policy meeting this week, with a focus on
the U.S. central bank’s rate outlook.
Spot gold rose 0.2% to $1,928.19 per ounce by 0256
GMT. U.S. gold futures were up 0.2% to $1,949.30.
Asian shares fell, making gold more attractive for
investors ahead of policy decisions by the Fed on Wednesday,
Bank of England on Thursday and the Bank of Japan on Friday.
“Gold was making some moves to the upside to start the week
on some safe-haven buying, with the upcoming economic calendar
containing plenty of possible central bank event-risk,” said KCM
Trade Chief Market analyst Tim Waterer.
Faster growth, cooler inflation and a job market that won’t
quit have set the stage for an updated batch of forecasts from
Fed officials this week, which is likely to reflect their
growing faith in prospects for an economic soft landing.
However, they will likely keep one more rate hike on the
Gold, which offers no yield, tends to fall out of favour
among investors when interest rates rise.
COMEX gold speculators cut net long position by 16,544
contracts in week ended Sept. 12, data showed on Friday.
“Indeed, the growing soft-landing and higher-for-longer
rates narrative sapped investor appetite for the yellow metal,”
TD Securities wrote in a weekend note.
“The upbeat CPI and retail sales data only further
emboldened this narrative, suggesting the bulls will need to be
patient for another upside catalyst.”
Chinese gold prices hit record highs last week, extending a
months-long rally as consumers snap up the safe-haven asset to
offset a depreciating yuan. Physical gold premiums also soared
to new highs.
Spot silver climbed 0.8% to $23.19 per ounce,
platinum gained 0.4% to $928.66 and palladium was
flat at $1,248.50.
(Reporting by Swati Verma in Bengaluru; Editing by Sherry
Jacob-Phillips and Varun H K)
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