Investing.com – Gold prices held steady on Monday, unable to make a clean break above the $1,300 handle as investors waited for the results this week of the latest Federal Reserve policy decision and another round of trade talks between the U.S. and China.
At 9:37 AM ET (14:37 GMT), for February delivery on the Comex division of the New York Mercantile Exchange slipped 25 cents, or 0.02%, to $1,297.85 a troy ounce, pulling back below the $1,300 psychological level after touching $1,303.75 earlier in the session. Gold last managed to close above $1,300 on June 14.
The Fed will conclude its two-day policy meeting on Wednesday and is widely expected to hold rates steady after raising them in December for the fourth time in 2018. The U.S. central bank has indicated that it will hike rates twice this year, but some central bank officials have said they will be patient and cautious in raising rates as risks to the U.S. economy mount.
Higher interest rates tend to weigh on demand for gold, which doesn’t bear interest, in favor of yield-bearing investments.
Meanwhile, the ongoing trade negotiations between the U.S. and China are also expected to be a major focus this week, as the two sides try to reach a trade deal before a deadline on March 1. Chinese Vice Premier Liu He will visit the U.S. for talks that will be held on Wednesday and Thursday.
U.S. President Donald Trump has threatened to move forward with fresh tariffs on Chinese imports if an agreement isn’t reached by the March 1 deadline.
“Although coming to an agreement is still tricky, both sides have little incentive to escalate tensions,” said Tai Hui, Hong Kong-based chief market strategist for Asia Pacific at J.P. Morgan Asset Management, in a note. “Markets will at least expect an extension of the truce in tariff increases beyond early March, while more difficult issues are still being worked on by both sides.”
U.S. officials have given different assessments of the state of negotiations. U.S. Treasury Secretary Steven Mnuchin has said the two countries are “making a lot of progress” while Commerce Secretary Wilbur Ross told CNBC that the U.S. was “miles and miles” from reaching a trade deal with China.
In other metals trading, lost 0.42% at $15.633 a troy ounce by 9:40 AM ET (14:40 GMT).
fell 1.83% to $1,295.70 an ounce, while sister metal traded down 0.72% at $812.40.
In base metals, declined 1.36% to $2.692 a pound.
— Reuters contributed to this report.
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Source: Investing.com
