Gold edges up as dovish Fed comments lower rate hike prospects
Gold edged higher on Tuesday after comments by a top Federal Reserve official reduced prospects of a US interest rate hike next week.
The Fed should avoid removing support for the US economy too quickly, Board Governor Lael Brainard said on Monday in comments that solidified the view the central bank would leave rates unchanged next week.
"The comments balance hawkish views by other Fed officials and gold is moving on that," said Yuichi Ikemizu, head of commodity trading at Standard Bank in Tokyo.
"It is still the same story of a $1,300-$1,400 range for gold. I don't think we are going to see any major move until the Fed meeting next week."
Spot gold was up about 0.1 percent at $1,328.50 an ounce at 0656 GMT.
U.S. gold futures were up 0.5 percent at $1,332.20 an ounce.
Traders trimmed their odds for a September rate hike to 15 percent from 24 percent on Friday, according to CME Group.
"As the market reduces the likelihood of a near-term rate rise and if oil losses stabilize, gold prices should find a
bottom, at least in the run up to the FOMC," HSBC analyst James Steel said in a note.
Asian stocks rose early on Tuesday, buoyed by an overnight rally on the Wall Street.
Spot gold may end its current bounce around resistance at $1,330 per ounce before resuming its downtrend, according to Reuters technical analyst Wang Tao.
"We are now in the Federal Reserve blackout period leading into next week's Fed meeting and it is looking increasingly likely that we won't see the committee move on rates this month," MKS PAMP Group Trader Sam Laughlin said.
"Gold should see support broadly between $1,320- $1,325, while resistance sits toward $1,340."
Spot silver climbed 0.4 percent to $19.14 an ounce, after hitting an over one-week low of $18.69 in the previous session.
Platinum slipped 0.4 percent at $1,049.35. It touched its lowest in more than two months at $1,033.45 on Monday.
Palladium was trading marginally lower at $660.40. It hit a low of $650.15 Monday, a level not seen since July 20.