Gold retraces from 6-year peak after comments from U.S. Fed officials
* Gold set to gain for sixth straight session
* Dollar gains after dipping to 3-month low
* Fed "insulated from short-term political pressures"-
* Fed's Bullard does not see need for half-point rate cut
(Ads analyst comments, market details, updates prices)
By Karthika Suresh Namboothiri and Diptendu Lahiri
June 25 (Reuters) - Gold prices retreated from a six-year
high on Tuesday after comments from U.S. Federal Reserve
officials trimmed expectations that the central bank will lower
interest rates by half a percentage point next month.
Federal Reserve Chairman Jerome Powell said the U.S. central
bank is "insulated from short-term political pressures," as
policymakers wrestle with whether to cut rates.
The comments came after St. Louis Federal Reserve Bank
President James Bullard said he does not think the U.S. central
bank needs to cut interest rates by a half-percentage point at
its next meeting in July.
Spot gold was up 0.3% at $1,423.26 per ounce as of
2:36 p.m. EDT (1836 GMT). Prices had touched a high of $1,438.63
in the session, a level last seen in May 2013, and were set for
a sixth straight sessions of gains.
U.S. gold futures were little changed on settlement
"The whole gold move (higher) was on the back of the Fed's
signal to cut rates by 50 basis points in the last FOMC (Federal
Open Market Committee) meeting," said Bob Haberkorn, senior
market strategist at RJO Futures.
"Now, Bullard and Powell's comments are going against that
and Trump's wishes. It is probable that gold might continue
paring gains to until the G20 meeting."
The comments lifted the dollar and pressured gold, prompting
bullion to turn negative briefly, after it had rallied more than
1% earlier in the session on the back of expectations of
monetary easing by the Fed and a subdued dollar.
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion, and gold had gained nearly $100 in value
since the Fed's statement last week that hinted at monetary
Meanwhile, tensions between Iran and the United States
lifted demand for safe-haven gold. Investors also
watched for further cues on trade negotiations between
Washington and China at the G20 summit.
"People have been buying what they feel could be an
additional haven on more upcoming volatility caused by global
economic pullback, the tinder box of the Middle East with Iran,
and the G20, which may not bring the (trade) deal with China
that everybody is expecting," said George Gero, managing
director at RBC Wealth Management.
Indicating investor interest in gold, holdings of SPDR Gold
Trust, the world's largest gold-backed exchange-traded
fund, rose 0.37% on Monday, after posting their biggest
percentage gain in nearly 11 years on Friday.
Among other precious metals, platinum declined 0.71%
to $804.25 per ounce, while silver dipped 0.5% to $15.36.
Palladium slipped 0.5% to $1,527.01 after hitting its
highest level since March 26 at $1,551, earlier in the session.
(Reporting by Karthika Suresh Namboothiri and Diptendu Lahiri
Editing by Will Dunham and Matthew Lewis)
First Published: 2019-06-25 03:18:42
Updated 2019-06-25 20:58:38
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