PRECIOUS-Gold steady as Fed rate hike outlook weighs on dollar

Source : REUTERS
Last Updated: Tue, Mar 21, 2017 07:00 hrs

March 21 (Reuters) - Gold prices edged up on Tuesday to hold near two-week highs hit in the previous session, with the dollar dipping after the Chicago Federal Reserve's president said the U.S. central bank would not rush to hike interest rates. FUNDAMENTALS * Spot gold was up 0.1 percent at $1,234.40 per ounce by 0045 GMT. On Monday, it touched its strongest since March 6 at $1,235.50. * U.S. gold futures were mostly unchanged at $1,234.60. * The dollar index , which measures the greenback against a basket of currencies, was down 0.2 percent at 100.190. * The Fed will likely wait at least until a June policy meeting to decide whether to lift U.S. interest rates again, giving it time to digest economic and financial market data as well as any clarity on the Trump administration's fiscal policy plans, Chicago Fed President Charles Evans said on Monday. * Markets were bracing for a packed week of Fed messaging with several policy makers set to speak, including Chair Janet Yellen on Thursday. * Yellen's cautious guidance last week has investors pricing in almost no chance of another rate rise at the next policy meeting in May. * While Asian shares have been supported by signs of strong global economic growth, concerns about protectionism cast a shadow after financial leaders of the world's biggest economies dropped a pledge to keep global trade free and open, acquiescing to an increasingly protectionist United States. * Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.46 percent to 830.25 tonnes on Monday from 834.10 tonnes on Friday. * Greece and its euro zone creditors are still at odds over reforms required before new loans can be disbursed to Athens, the head of euro zone finance ministers said on Monday after an inconclusive meeting in Brussels. * Ultra-low Bank of England interest rates since the financial crisis have probably taken a modest toll on productivity, but were a price worth paying to avoid higher unemployment, Bank of England chief economist Andy Haldane said on Monday. * Russia's central bank, which is seeking to diversify the country's official reserves, posted an increase in its gold reserves in February, for the second consecutive month. DATA AHEAD (GMT) 0930 Britain Consumer prices Feb 1230 U.S. Current account Q4 (Reporting by Nallur Sethuraman in Bengaluru; Editing by Joseph Radford)



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