Gold inched lower on Monday as investors remained cautious ahead of policy meetings of three major central banks, while keeping an eye on the appointment of the next US Federal Reserve chair. The market is awaiting cues from the meetings of the Federal Open Market Committee (FOMC) and central banks of England and Japan this week. US President Donald Trump is also expected to announce the next head of the Federal Reserve, amid speculations that governor Jerome Powell could be the favored candidate. Spot gold dipped 0.3 percent, to $1,269.23 per ounce at 0724 GMT. US gold futures for December delivery were down 0.1 percent, to $1,270.10. “The week is very data heavy, with many tier 1 central bank decisions, PMI’s and other data culminating in Friday’s non-farm payrolls,” said Jeffrey Halley, a senior market analyst with OANDA. “With dovish ECB and Bank of Canada followed by impressive US GDP data last week, we would expect the dollar to remain on the front foot and gold to struggle,” he added. Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion. Meanwhile, Trump is leaning toward nominating Powell from a short list of five candidates to be the next Fed chair, two sources familiar with the matter said on Friday. “Powell is said to be the front-runner right now and is being viewed by the markets as coming from the dovish/(Janet) Yellen camp, so certainly his appointment could cool the rate and dollar rally heading into November,” INTL FCStone analyst Edward Meir said in a note. The dollar index softened against a basket of currencies, while Asian shares climbed, with MSCI’s broadest index of Asia-Pacific shares outside Japan gaining 0.4 percent. Spot gold may bounce moderately to a resistance at $1,278 per ounce before falling again, according to Reuters technical analyst Wang Tao. Hedge funds and money managers cut their net long positions in COMEX gold contracts for the sixth straight week, in the week to Oct. 24, US Commodity Futures Trading Commission (CFTC) data showed on Friday. Among other precious metals, silver slipped 0.7 percent to $16.72 an ounce. Platinum dipped 0.2 percent to $912.70 an ounce, while palladium rose 0.4 percent to $969.22 an ounce.

Source:Arabnews