Gold price around $1,200/oz on softer dollar ahead of Fed meeting
London (Apr 28) Gold was flat on Tuesday as the dollar edged lower ahead of a U.S. Federal Reserve policy meeting that could provide a steer on when interest rates will rise.
Spot gold was unchanged on the day at $1,201.12 an ounce at 1001 GMT. It jumped nearly 2 percent in the previous session, when it hit its highest level in a week at $1,207.01.
U.S. gold futures for June delivery were down $2.90 at $1,200.20 an ounce.
"There is a lot of intraday volatility in gold and silver but the overall situation remains negative," ABN Amro analyst Georgette Boele said.
"We have a bit more U.S. data in coming weeks and if that continues to disappoint, gold could see some modest support."
The dollar fell 0.2 percent against a basket of leading currencies ahead of U.S. consumer confidence and housing data that will shed more light on the state of the world's largest economy.
Recent sluggish economic data from the United States led the market to expect the Fed will probably not act until later in the year.
The Fed's two-day meeting kicks off on Tuesday, with a statement scheduled for release on Wednesday.
Interest rates at rock-bottom levels have benefited gold during the years after the 2008-2009 financial crisis as the metal does not bear any interest. Conversely, a rate hike could dent demand for bullion as investors' appetite for non-yielding assets diminish.
Traders were also monitoring debt talks in Greece after Prime Minister Alexis Tsipras reshuffled his team handling talks with European and IMF lenders, a move seen as a step closer to securing fresh funding.
Options-related buying also buoyed prices on Monday as U.S. May options expired at the end of the day with relatively heavy open interest at the $1,200 strike price, traders said.
In the physical markets, demand eased on Tuesday as the price neared the key $1,200 level.
"Buyers don't want to commit too much for physical gold at these prices," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
China's gold imports from Hong Kong dipped to their lowest level in seven months in March, data showed on Tuesday.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.44 percent to 739.07 tonnes on Monday, the first decline in two weeks.
Among other precious metals, silver was down 0.1 percent at $16.35 an ounce, after a 4.3 percent gain in the previous session, boosted by gold's advance.
Platinum fell 0.7 percent after a 2.3 percent jump on Monday, its sharpest rise in nearly five months, while palladium fell 0.4 percent to $774.05 an ounce.
Source: Reuters
