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PRECIOUS-Gold hits near 2-week high on softer dollar; focus on Fed meeting

Published 2020-09-14, 11:46 p/m
© Reuters.
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* U.S. Fed's policy announcement on Wednesday

* Spot gold may test resistance at $1,975/oz- technicals

* Platinum hits near one-month high

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)

By Brijesh Patel

Sept 15 (Reuters) - Gold hit a near two-week high on Tuesday as the dollar weakened and investors turned their focus to a U.S. Federal Reserve monetary policy meeting, seeking details of how it planned to hold down rates while aiming to boost inflation.

Spot gold XAU= was up 0.4% at $1,963.22 per ounce by 0643 GMT, after hitting $1,968.80 earlier, its highest level since Sept. 2. U.S. gold futures GCcv1 climbed 0.5% to $1,973.

"Gold looks firm mainly because of a weaker dollar and also U.S. Treasury yields are coming down a bit," said Edward Meir, an analyst at ED&F Man Capital Markets.

The dollar index .DXY slipped against its rivals, making gold less expensive for holders of other currencies. USD/ US/

Market participants now await the U.S. Fed's two-day policy event which ends on Wednesday, its first such meeting since Chairman Jerome Powell unveiled a policy shift towards greater tolerance of inflation, effectively pledging to keep interest rates low for longer. the Jackson Hole symposium, the market is asking for a bit more colour around by what means the Fed plans to stoke inflation," said IG Markets analyst Kyle Rodda.

"It's also asking for some indication that the Fed will continue to suppress risk-free rates, if inflation does begin to seriously emerge."

Gold, which has risen nearly 30% this year so far, is seen as a hedge against inflation. Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

U.S. Treasury Secretary Steven Mnuchin and Powell will testify before the Senate Banking Committee on coronavirus relief, the committee said on Monday. gold may test resistance at $1,975 per ounce, a break above could lead to a gain into $1,984-$1,996 range, Said Reuters technical analyst Wang Tao. TECH/C

Elsewhere, platinum XPT= rose 0.6% to $959.67 per ounce after hitting its highest since Aug. 18 at $966.

Silver XAG= gained 0.7% to $27.34 and palladium XPD= was up 0.3% at $2,320.98.

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