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Recession fears provide floor for gold prices -analyst
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U.S. PCE price index data due this week
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Swiss gold exports to China rose in March
(Adds detail, updates prices)
By Ashitha Shivaprasad
April 26 (Reuters) - Gold prices stuck within a narrow
range on Wednesday as traders strapped in for U.S. economic data
for further guidance on the Federal Reserve's monetary policy
stance.
Spot gold was little changed at $1,998.50 an ounce by 1115 GMT while U.S. gold futures rose 0.3% to $2,009.50. The market is awaiting U.S. quarterly gross domestic product data due on Thursday, followed by the reading on the core PCE price index on Friday, ahead of the Fed's May 2-3 policy meeting. All eyes will be on the tone the Fed strikes at its meeting, said Michael Hewson, chief market analyst at CMC Markets.
"Further weakness in yields should be positive for gold as
long as $1,960 holds on the downside, but much will depend on
whether the Fed signals a pause (to interest rate hikes) when it
makes its decision next week." Traders are mostly expecting the U.S. central bank to raise
rates by 25 basis points. Gold is considered an inflation hedge and a safe-haven
investment in times of economic uncertainty, but rising interest
rates dent non-yielding bullion's allure.
U.S. consumer confidence dropped to a nine-month low in
April.
"Recessionary fears already seem to be providing a floor for
gold prices," said Matt Simpson, a senior market analyst at City
Index.
On the physical side, data showed Swiss gold exports to
China rose in March while shipments to India and Turkey fell.
Spot silver was down 0.5% at $24.92 an ounce.
A correction in the dollar and a spike in gold prices could attract more safe-haven buying in silver, Geojit Financial Services research head Hareesh V said in a note. Platinum jumped 1.3% to $1,100.11 and palladium was up 2.2% at $1,516.05.
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(Reporting by Ashitha Shivaprasad and Arundhati Sarkar in
Bengaluru
Editing by David Goodman)
