* U.S. markets closed for holiday
* Focus turns to Fed Chair Powell’s testimony to Congress
* Silver, platinum down
June 19 (Reuters) – Gold prices ticked down in light
trade on Monday pressured by a stronger dollar, as investors
assessed the path ahead for interest rates following hawkish
remarks from U.S. Federal Reserve policymakers.
Spot gold fell 0.1% to $1,955.49 per ounce by 0249
GMT. U.S. gold futures eased 0.2% to $1,967.60.
The dollar index held firm, making bullion less attractive
for buyers holding other currencies.
Fed officials struck a hawkish tone in their first comments
since the central bank held the policy interest rate steady at
its meeting last week.
“Gold has spent the majority of June between $1,935-$1,970,
and with no obvious catalyst on the horizon, traders prefer to
trade the ranges and not fully commit to a breakout,” said Matt
Simpson, senior market analyst at City Index.
U.S. stock markets will be closed on Monday for the
Juneteenth holiday.
Bullion posted a small weekly fall last week as traders
ramped up bets for a July rate hike following the Fed’s hawkish
pause after 10-straight hikes.
Although gold is considered a hedge against inflation,
interest rate hikes raise the opportunity cost of holding
non-yielding bullion.
Traders are now pricing in an about 72% chance of Fed rate
hike in July, according to the CME Fedwatch tool.
“Historically, gold prices can outperform at end of Fed
tightening cycle. While opportunity cost of holding gold has
risen, we reckon it should not be long to see real yields ease
lower at some stage. This can be supportive of gold prices,”
said OCBC FX strategist Christopher Wong.
Investors now await Fed Chair Jerome Powell’s congressional
testimonies on Wednesday and Thursday for further cues on future
rates.
Spot silver fell 0.2% to $24.098 per ounce, platinum
dropped 0.4% to $977.61, while palladium was
steady at $1,412.10.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Rashmi
Aich)
Read More: Gold ticks lower, traders assess Fed rate trajectory