PRECIOUS-Gold dips, but lingers near 4-wk high ahead of Fed meeting

Published 2016-06-14, 03:23 a/m
© Reuters.  PRECIOUS-Gold dips, but lingers near 4-wk high ahead of Fed meeting
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* Fed meeting begins later on Tuesday
* Silver trading near one-month high
* Brexit fears weigh on market sentiment

(Recasts, updates prices)
By Koustav Samanta
BENGALURU, June 14 (Reuters) - Gold inched down on Tuesday
as investors waited for cues from a two-day U.S. Federal Reserve
meeting beginning later in the day and a June 23 referendum that
will decide whether Britain will exit the European Union.
Spot gold XAU= was down 0.4 percent at $1,279.16 an ounce
as of 0648 GMT, but has gained more than 5 percent this month,
hitting a peak of $1,287 on Monday, its highest since May 16.
U.S. gold GCcv1 fell 0.4 percent to $1,282.30.
"I think investors have decided to take profits and some of
them are staying on the sidelines before taking a decision on
what to do next until the Fed makes an announcement," said Brian
Lan, managing director at Singapore-based gold dealer GoldSilver
Central.
Bullion, which is often perceived as a hedge against
economic and financial uncertainty, has been driven by rising
investor risk aversion before key central bank meetings this
week.
Apart from the Fed, the Bank of England, Swiss National Bank
and the Bank of Japan will meet this week, and are expected to
hold monetary policies steady against a backdrop of caution
about the global economic outlook.
The safe-haven appeal of gold, which is near a four-week
high hit in the previous session, could get a further boost if a
vote by Britain to leave the 28-member group, dubbed "Brexit,"
pushes Europe back into a recession.
The British pound remained fragile near a two-month low
against the dollar, while Asian stocks slipped on Tuesday on
concerns ahead of the referendum. USD/ MKTS/GLOB
Britain's "Out" campaign widened its lead over the "In" camp
ahead of the referendum, according to two opinion polls
published by ICM on Monday.
"We think that the risk of Britain leaving has now increased
substantially and the Fed will therefore signal its willingness
in no uncertain terms to 'stay the course' in light of this
potential 'Black Swan' event," INTL FCStone analyst Edward Meir
said in a note.
"This will likely enable gold to push even higher over the
next few days, at least until the polls start to swing the other
way."
Meanwhile, Hong Kong Exchanges and Clearing Ltd 0388.HK is
aiming to launch its planned physically-delivered gold futures
contract in September, its head said on Tuesday.
Holdings in SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, rose 0.27 percent to 896.30
tonnes on Monday, the highest since October 2013. GOL/ETF
Spot silver XAG= fell 0.8 percent to $17.29 per ounce,
after touching a one-month high of $17.45 on Monday.

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