Gold price steadies as dollar dips, central banks in focus

London (Oct 31)  Gold steadied on Tuesday amid a slightly weaker dollar, but the precious metal remained largely in a holding pattern as investors awaited central bank meetings, U.S. payrolls data and the announcement of the next Federal Reserve chair.

The dollar touched an 11-day low versus the yen on investor caution over political turmoil in the White House, with the Japanese currency showing little reaction after the Bank of Japan kept its monetary policy steady as widely expected.      

The U.S. Federal Reserve will begin a two-day policy meeting later this session, and U.S. President Donald Trump is likely to pick Fed Governor Jerome Powell as the next head of the U.S. central bank on Thursday.             

Powell is seen as more dovish than other contenders for the post like Stanford University economist John Taylor.

"With Powell being a dove it kind of keeps the status quo, so we still see the dollar going higher from here, but in a
gradual fashion. That's likely to be a source of modest downward pressure for gold," said Martin Arnold, commodity strategist at ETF Securities.

Spot gold was little changed at $1,275.69 per ounce at 0926 GMT. It has shed about 0.3 percent so far in October, in what could be its second straight monthly decline.

U.S. gold futures for December delivery dipped 0.1 percent to $1,276.60.

Ongoing political unrest in Catalonia was also in focus for
gold, seen as a safe haven asset, along with U.S. payrolls data
on Friday and a Bank of England policy meeting on Thursday.
    "The market is catching its breath for what will be a very
data-heavy second half of the week," said Jeffrey Halley, a
senior market analyst with OANDA.
    "Gold itself appears to have lost any risk-aversion premium
for now and is thus completely at the mercy of the nuances of
the U.S. bond and stock market, and by default the U.S. dollar,"
he added.  
    Federal investigators probing Russian interference in the
2016 U.S. election charged Trump's former campaign manager, Paul
Manafort, and another aide, Rick Gates, with money laundering on
Monday.
    The news has pressured the dollar, but global stock markets
continued their ascent on Tuesday to near a whisker of their
all-time highs, indicating investors continue to favour assets
perceived as risky versus safe-haven gold.
    Among other precious metals, silver edged up 0.1
percent at $16.86 an ounce. Platinum ained 0.1 percent
to $919 an ounce, while palladium climbed 0.9 percent to
$972.60 an ounce.