RTRS: PRECIOUS-Gold steady ahead of Fed, near 2-week top
By Lewa Pardomuan
SINGAPORE, June 22 (Reuters) - Gold hardly moved on
Wednesday ahead of the outcome of a U.S. Federal Reserve meeting
which could weigh on the dollar, while worries the Greek debt
crisis may affect other countries sent bullion bullion-priced in
sterling to record high.
The Fed's two-day meeting ends on Wednesday, when markets
hope to learn more about policy to deal with an economy that
shows signs of slowing, although Chairman Ben Bernanke probably
will continue to argue the slowdown is temporary.
Spot gold was barely changed at $1,545.93 an ounce by
0542 GMT after rising as high as $1,547.90 on Tuesday, its
strongest since June 9 -- not far from a key resistance at
$1,550.
Gold struck a lifetime high around $1,575 in early May.
"Approaching the resistance level, we can say gold is a bit
cautious," said Ronald Leung, director of Lee Cheong Gold
Dealers in Hong Kong.
"But overall, there are still bullish signs because there's
a lot of mess around the world, which can't be solved," said
Leung, adding that markets expected the Fed to keep interest
rates low.
Gold priced in sterling struck a lifetime high
around 954 pounds on Wednesday, fuelled by lingering worries
about the debt crisis in Europe.
Greece's government will approve its new austerity package
on Wednesday after it survived a confidence vote, clearing the
first hurdle in a battle to secure emergency loans and avert the
euro zone's first sovereign debt default.
Financial markets are also bracing for the conclusion at the
end of June of the Fed's quantitative easing -- a cheap-money
policy credited with boosting stocks but blamed for sky-high
commodities prices and a weak dollar.
The dollar index , which tracks the greenback's
performance against a basket of major currencies, was at 74.635,
well off last week's peak of 76.015.
The Fed looks set to repeat its commitment to keeping
interest rates low for an extended period, while also
reiterating its intention to continue reinvesting proceeds from
maturing bonds it holds back into the Treasury market.
Recent gains in gold were driven by debt problems in Europe,
inflation fears in China following strong economic data and
worries about a U.S. economic slowdown.
Silver was steady at $36.31 an ounce, below a record
at $49.51 an ounce in April.
The physical market barely moved, with main consumer India
in a lean demand period during the monsoon season as farmers
divert their savings to agricultural equipment and fertiliser
for summer-sown, or kharif, crops.
Premiums for gold bars were steady at 60 to 80 cents to the
spot London prices in Singapore and at between 80 cents to $1.30
in Hong Kong.
"It's awfully quiet," said a physical dealer in Singapore.
"There was a little bit of buying and selling last night. It
was not much."
In other markets, the Nikkei stock average climbed about 2
percent as short-covering kicked in after Greece's government
survived a confidence vote crucial to avoiding default, with
recent decliners such as Sony Corp making big gains.
