July 30, 2018

Gold price eases on firm dollar ahead of central bank meetings

(Reuters) - Gold prices slipped on Monday as the dollar stood tall against its peers ahead of key central bank meetings and U.S. inflation and payrolls data this week.  

    Spot gold  was down about 0.3 percent at $1,219.91 an ounce at 0335 GMT. U.S. gold futures  were 0.3 percent lower at $1,219.10 an ounce.    

    The dollar rose slightly in Asia against major rivals on Monday, as market participants awaited central bank meetings

this week, which could set the near-term course for currencies.

    The greenback also traded close to a 13-month high versus  China's yuan .

    "The dollar-CNH is putting pressure on gold. We've got a lot of central bank meetings this week but I think the big one for

us is probably the Federal Open Market Committee (FOMC). The Bank of Japan is probably going to move the dollar/yen a bit

tomorrow," a Hong Kong-based trader said.

    The Bank of Japan holds a monetary policy meeting on Monday and Tuesday, while the U.S. Federal Reserve meets on Tuesday and Wednesday. The Fed is likely to reaffirm its outlook for gradual rate increases in the United States.

    Higher U.S. rates tend to boost the dollar and bond yields, making greenback-denominated gold more expensive for other

holders, especially since gold does not pay interest or dividends. 

    Investors are also looking ahead to the Bank of Japan meeting for signs of a potential policy shift.

    The Bank of England is due to announce a policy decision on Thursday.   

    Asian shares drifted lower on Monday at the start of a busy week peppered with corporate results and updates on U.S.

inflation and payrolls, as well as the central bank meetings.

    "Technically I think the trend is still down but post-FOMC I'm always a bit anxious of being short because generally we see

a bit of bounce after FOMC," the trader said.

    Spot gold still targets a range of $1,206-$1,214 per ounce, as its bounce from the July 19 low of $1,211.08 has completed,

according to Reuters technicals analyst Wang Tao.

    Hedge funds and money managers increased their net short position in COMEX gold contracts to a record in the week to July

24, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday. 

    Investors added 5,001 contracts to their net short position, bringing it to 27,156 contracts, the biggest on record dating

back to 2006, CFTC data showed.

    In other precious metals, silver  fell 0.3 percent at $15.41 per ounce, after hitting a one-week low at $15.29 in the

previous session.

    Platinum  fell 0.5 percent to $821.40, while palladium  rose 0.4 percent at $924.50.