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Industrial demand for silver to be high in 2023 - analyst
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US manufacturing contracts in April
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Palladium up 1%
(Adds comment and updates prices)
By Ashitha Shivaprasad
May 2 (Reuters) - Gold prices were flat on Tuesday, as
cautious market participants awaited fresh cues from top central
banks on their monetary policy plans, especially from the U.S.
Federal Reserve.
Spot gold was little changed at $1,983.89 per
ounce by 0652 GMT. U.S. gold futures was steady at
$1,992.10.
The Fed, which meets on May 2-3, is widely expected to raise
interest rates by 25 basis points. Gold prices could move towards $2,000 if the Fed highlights
recession worries and hints at a pause in the rate hike cycle,
said Ajay Kedia, director at Kedia Commodities in Mumbai.
U.S. manufacturing contracted in April but there was a
build-up of inflation pressures, supporting expectations of Fed
rate hike, according to data released on Monday.
The European Central Bank (ECB) is also likely to increase
its rates for the seventh straight meeting on Thursday.
Bullion is known as a hedge against inflation and economic
uncertainties, but rising rates tend to diminish demand for the
zero-yielding asset.
On Monday, gold prices briefly rose above $2,000 after
regulators seized and sold First Republic Bank's assets
to JPMorgan Chase & Co , in a deal to resolve the largest
U.S. bank failure since the 2008 financial crisis and draw a
line under a lingering banking turmoil.
"Our expectation is for gold to moderate and decline over
2023 as the stimulus measures in China begin to have an
effect... It will reduce the perceived need to hold more
conservative assets like gold," said Michael Langford, director
at corporate advisory AirGuide.
Spot silver fell 0.4 % at $24.88 per ounce.
"We are bullish on silver as its industrial demand is going
to be high in 2023. Prices could hit $32," Kedia added.
Platinum lost 0.1% to $1,049.15 while palladium edged 1% higher to $1,466.26.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by
Varun H K)
