Gold holds steady near 6-week highs with Yellen, Brexit

Gold futures were little changed in European trade on Wednesday, after climbing to a six-week high in the prior session, as investors looked ahead to the conclusion of the Fed meeting and the U.K. vote on whether to leave the European Union.

While the Fed is widely expected to leave interest rates unchanged at the conclusion of its policy meeting at 18:00GMT, or 2:00PM ET, Wednesday, the U.S. central bank could provide guidance on its pace of tightening over the next several months.

Fed Chair Janet Yellen is to hold what will be a closely-watched press conference 30 minutes after the release of the Fed’s statement, as investors look for any change in tone about the economy or future rate hikes. The central bank will also release its latest forecasts for economic growth and interest rates.

Investors all but ruled out a rate hike in June after U.S. employment data earlier this month showed the economy added just 38,000 jobs last month, the smallest increase since September 2010.

Market players are pricing in a 20% chance for a rate hike in July and 35% for September, according to CME Group’s (NASDAQ:CME) FedWatch tool. December odds were at about 59%.

Besides the Fed, traders will be watching producer price inflation data and the Empire state survey, both due at 12:30GMT, or 8:30AM ET, while industrial production data is due at 13:15GMT, or 9:15AM ET.

Gold for August delivery on the Comex division of the New York Mercantile Exchange inched up 75 cents, or 0.06%, to trade at $1,288.85 a troy ounce by 06:48GMT, or 2:48AM ET.

A day earlier, gold rallied to $1,293.00, the most since May 6, amid mounting concerns the U.K. will vote to leave the European Union in a referendum next week. A series of recent opinion polls showed a big lead for the “leave” camp ahead of the country’s June 23 referendum.

Prices of the precious metal are up 6% so far in June, as market players pushed back expectations for the next U.S. rate hike and amid worries that Britain might vote to leave the European Union.

Elsewhere on the Comex, silver futures for July delivery tacked on 2.1 cents, or 0.12%, to trade at $17.44 a troy ounce during morning hours in London, while copper futures rose 1.7 cents, or 0.86%, to $2.058 a pound.

June 15, 2016
Investing.com