PRECIOUS-Gold wavers as U.S. rate hike in June remains a possibility

Published 2016-04-27, 08:55 p/m
© Reuters.  PRECIOUS-Gold wavers as U.S. rate hike in June remains a possibility
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SINGAPORE, April 28 (Reuters) - Gold eased on Thursday,
after the Federal Reserve kept the door open for an interest
rate hike in June, although it indicated it was in no hurry to
take such a step.

FUNDAMENTALS
* Spot gold XAU= had eased 0.1 percent to $1,244.50 an
ounce by 0043 GMT. The metal has gained about 1 percent in the
last three sessions.
* Gold rose as far as $1,250.09 on Wednesday, but pared
gains after the Fed statement.
* That statement largely mirrored the one issued after the
Fed's last policy meeting in March, with the U.S. central bank's
rate-setting committee describing an improving labour market but
acknowledging that economic growth seemed to have slowed.
* It also said it was closely watching inflation and noted
that global economic headwinds remained on its radar, though it
made no mention of the risks they posed, as it had last month.

* Investors currently see a 23-percent probability that the
Fed's overnight lending rate will rise in June, up from 21
percent prior to the decision, according to CME's FedWatch
group.
* U.S. short-term interest rate futures contracts swung
down, then up on Wednesday after the Fed's statement. Prices
currently reflect the expectation the Fed will wait until
September before raising rates, the same as before the Fed's
meeting.
* Gold has rallied 17 percent this year on expectations that
the Fed will not raise rates aggressively this year due to
global economic risks. The U.S. central bank raised rates in
December for the first time in nearly a decade.
* Asian stocks climbed on Thursday, while the dollar traded
flat against a basket of major currencies, holding three days of
losses.
* The focus now will turn to the Bank of Japan's policy
decision expected later in the session.
* The BOJ's policy decision, which is often announced around
0300 GMT, will be a close call. Policymakers are likely hesitant
to take further steps after unveiling their negative interest
rate policy in January, though a strong yen and receding
inflation expectations could prompt them to ease further.

* Gold is likely to track dollar/yen movements after the BOJ
decision.
* For the top stories on metals and other news, click
TOP/MTL or GOL

DATA AHEAD (GMT)
0755 Germany Unemployment rate Apr
0900 Euro zone Business climate Apr
1200 Germany Consumer prices Apr
1230 U.S. GDP advance Q1
1230 U.S. Weekly jobless claims

PRICES AT 0043 GMT
Metal Last Change Pct chg

Spot gold 1244.5 -1.2 -0.1
Spot silver 17.231 0.021 0.12
Spot platinum 1021.83 1.83 0.18
Spot palladium 608.7 1.2 0.2
Comex gold 1246.6 -3.8 -0.3
Comex silver 17.225 -0.064 -0.37

COMEX gold and silver contracts show the most
active months

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