Gold yo-yoed in Asia on Tuesday, briefly touching a crucial resistance level of $395 an ounce, but it was unable to make further headway despite dollar weakness, dealers said.
Gold was trading at $394.25/395.00 an ounce, versus $393.40/394.15 last quoted in New York on Monday.
The metal touched a low of $392.70 an ounce in Asia. "People are staying away from the market ahead of the Fed meeting. People are wondering what to do next, what will happen next and so on," said one regional dealer.
Markets widely expect the Federal Reserve to raise interest rates by a quarter of a percentage point at its policy meeting on June 29-30, but the pace of rate rises after that is uncertain.
In Tokyo, benchmark April futures added three yen per gram to 1,379 yen, having touched a high of 1,382 yen. Against the dollar, the euro traded at $1.2114, versus $1.2110 in late US trade.
Higher US interest rates tend to boost demand for the dollar, which would theoretically damage gold's allure, but the precious metal can also be used as an inflation hedge.
Signs of a strong recovery in the US economy in recent months have led investors to conclude the Fed will continue to raise rates beyond June.
But with various Fed officials indicating that the central bank will act only gradually or at a "measured pace" traders were wondering if the market might have overreacted.
Platinum touched a high of $815 an ounce before falling back after buying interest from Japan subsided.
It was quoted at $803/808 an ounce, down from $811/816 last quoted in New York.
Palladium was at $227/232 an ounce, up from $224.50/229.50. Silver fell to $5.83/5.85 an ounce from $5.84/5.86.
Comments
Comments are closed.