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Fed rate decision due at 1800 GMT
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Perth Mint's April gold sales slip m/m
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US job openings drop in March
(Updates prices)
By Ashitha Shivaprasad
May 3 (Reuters) - Gold prices held steady above the key
$2,000-level on Wednesday, while investors turned their
attention to the U.S. Federal Reserve's interest rate decision
due later in the day.
Spot gold was trading in a narrow $5.48 range,
holding its ground at $2,017.09 per ounce by 0648 GMT after
rising more than 1% in the previous session, as yields dropped
on renewed fears of contagion in the U.S. banking sector.
U.S. gold futures were up 0.1% at $2,025.60.
The Fed's rate decision will be announced at 1800 GMT. Most
investors expect the U.S. central bank to raise interest rates
by another 25 basis points, but are looking for clues on its
next steps. "If the Fed were to surprise with a pause, this would
suggest a deepening banking crisis and would likely send gold
higher," said Clifford Bennett, chief economist at ACY
Securities.
Bullion is known as a hedge against inflation and economic
turbulence, but higher rates tend to dent zero-yielding asset's
appeal.
Data on Tuesday showed that U.S. job openings dropped in
March and layoffs increased to the highest level in more than
two years, suggesting some softening in the labor market.
If uncertainties about the banking crisis and concerns over
a potential U.S. debt default persist, the dollar will loose its
shine and more light will fall on gold, Bennett said.
Top U.S. Senate Republicans on Tuesday called on President
Joe Biden to accept their party's debt-ceiling package or make a
counter-offer, while a top Democrat said the Senate might try to
advance a "clean" debt-ceiling hike next week.
On the physical front, Perth Mint's April gold product sales
slipped more than 6% month-on-month, while silver sales hit a
six-month peak.
Spot silver dipped 0.5% at $25.27 per ounce.
Platinum fell 0.1% to $1,064.94, while palladium gained 0.6% to $1,438.25.
Analysts have cut their forecasts for palladium after a 60%
price fall, but rising vehicle production should limit any
sell-off, a Reuters poll showed.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by
Sherry Jacob-Phillips and Varun H K)
