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PRECIOUS-Gold steady as markets brace for Fed decision

Published 2019-04-30, 09:40 p/m
© Reuters.  PRECIOUS-Gold steady as markets brace for Fed decision
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May 1 (Reuters) - Gold prices were little changed on Wednesday, having edged higher in the previous session on a weaker dollar, as investors await the U.S. Federal Reserve's decision on interest rates later in the day.

FUNDAMENTALS

* Spot gold XAU= was nearly steady at $1,282.01 per ounce as of 0107 GMT.

* U.S. gold futures GCv1 were also little changed at $1,284.30 an ounce.

* The euro climbed to a one-week high against the dollar on Tuesday after first-quarter economic growth figures in the euro zone beat market expectations, dispelling some pessimism over the economic bloc's common currency. FRX/

* Euro zone economic growth was stronger than expected in the first quarter, rebounding strongly from a slump in the second half of 2018, while unemployment fell to its lowest rate in more than a decade, data showed on Tuesday. Global equity markets edged higher on Tuesday as the Dow and S&P 500 indexes erased early lows caused by weak Chinese business surveys and a tumble in shares of Google parent Alphabet (NASDAQ:GOOGL). MKTS/GLOB

* In focus today is the U.S. Federal Open Market Committee (FOMC) announcement, which could offer clues on the future trajectory of interest rates. Any decision by the Fed to keep rates unchanged is widely seen as positive for gold.

* President Donald Trump, in perhaps his most unorthodox statement yet on monetary policy, called for the Fed to act as if the country was back in the throes of recession, with sharp interest rate cuts and renewed "quantitative easing" to pump trillions of dollars into the economy. Much of Asia is shut for a Labour Day holiday on Wednesday.

* U.S. labour costs increased steadily in the first quarter as a jump in transportation and manufacturing wages was offset by small gains elsewhere, pointing to moderate inflation pressures even as the labour market tightens. Newmont Goldcorp Corp NEM.N said on Tuesday it had suspended payments and social programs to workers, suppliers, and villages around Mexico's largest gold mine in response to a blockade by a contractor and members of one of the 25 communities. South Africa's Sibanye-Stillwater SGLJ.J said on Tuesday it had hoisted most of the miners from one of its Rustenburg mine shafts following concerns it had been damaged and would prevent 1,800 employees from surfacing. The London Bullion Market Association (LBMA) said Societe Generale SOGN.PA had resigned as a market maker for gold and silver, as France's third-largest bank pushes ahead with a downsizing of its commodities business.

DATA AHEAD (GMT)

* 0600 UK

Nationwide house price MM YY April

* 0830 UK

Markit/CIPS Mfg PMI

April

* 1400 U.S. ISM Manufacturing PMI

April

* 1800 U.S. FOMC announces its decision on interest rates

* 1830 U.S. Fed chairperson holds a news conference

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