Gold Gains as Official Sees BOE Stimulus, Dollar Sags Before Fedby and
Bank of England’s Weale said Brexit has rattled U.K. economy
Fed policy makers gather for two-day meeting in Washington
Spot gold headed for the first gain in three sessions on the outlook for interest rates to stay low as U.S. policy makers gathered for a two-day meeting and a Bank of England official indicated he favors immediate economic stimulus.
The BOE’s Martin Weale told the Financial Times that the U.K.’s vote to leave the European Union has rattled the economy more than he expected. U.S. Federal Reserve officials meet Tuesday and Wednesday, with traders putting only 10 percent odds of a rate increase this month. Gold also rose as a drop in the dollar curbed demand for the metal as an alternative asset.
“The gold community is waiting to see the tone of the Fed statement for clues about the potential of a September rate hike,” Tai Wong, the director of commodity products trading at BMO Capital Markets Corp. in New York, said in a telephone interview. "The dollar trading off its highs is helping gold remain above recent lows.”
Gold for immediate delivery gained 0.4 percent to $1,320.34 an ounce at 3:15 p.m. in New York, according to Bloomberg generic pricing. The metal is up 24 percent this year.
Gold futures for December delivery gained 0.1 percent to settle at $1,328.30 an ounce on the Comex in New York.
Holdings in gold-backed exchange-traded funds fell 4.5 metric tons to 2,000.5 tons on Monday, data compiled by Bloomberg show.
In other metals:
- Silver futures for September delivery climbed 0.2 percent to $19.683 an ounce on the Comex.
- On the New York Mercantile Exchange, platinum and palladium futures gained.