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Gold prices held steady on Monday on expectations of a rate cut by the Federal Reserve this week, while investors awaited cues on the future trajectory of monetary easing by the U.S. central bank.<\/p>\n\n
Spot gold<\/a>\u00a0inched up 0.16% to $1,420.61 per ounce.\u00a0U.S. gold futures<\/a>\u00a0was up 0.09% at $1,420.6.<\/p>\n\n \u201cClearly, the gold market is going to be somewhat on hold awaiting Fed commentary on Wednesday. We know that we are getting a 25 basis-point (bps) cut. (But) on Wednesday, the question will be what to look ahead for from there,\u201d said David Meger, director of metals trading at High Ridge Futures.<\/p>\n\n Federal funds futures implied traders saw a 77% chance of a 25 bps rate cut at the U.S. central bank\u2019s July 30-31 policy meeting.<\/p>\n\n \u201cMuch will also depend on what Fed Chair Jerome Powell says in the subsequent press conference: If he makes no mention of a cycle of rate cuts, causing gold to come under pressure, we would not see this as a trend reversal but as an attractive buying opportunity,\u201d analysts at Commerzbank said in a note.<\/p>\n\n Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar.<\/p>\n\n The dollar held close to a two-month peak against key rivals. A stronger greenback makes dollar-denominated assets such as gold costlier for investors holding other currencies.<\/p>\n\n \u201cWe have seen the dollar slowly gaining in the last couple of weeks. It has not caused any significant correction but had caused a pause in gold trading,\u201d High Ridge Futures\u2019 Meger added.<\/p>\n\n Market participants will also keep a close eye on the U.S.-China trade talks in Shanghai this week, as negotiators from both countries meet for their first in-person talks since a truce at G20 last month. Expectations are low for a breakthrough.<\/p>\n\n Gold is a preferred asset during times of economic and political uncertainties.<\/p>\n\n Hedge funds and money managers reduced their bullish stance in COMEX gold in the week to July 23, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.<\/p>\n\n On the technical front, $1,400 will be the key downside support for gold, and beyond that, $1,380, OANDA senior market analyst Craig Erlam said.<\/p>\n\n \u201cBulls are very reluctant to let go just yet, but if we do see those levels break, we might see gold bulls head for the exits quite quickly.\u201d<\/p>\n\n Among other precious metals, silver slipped 0.2% to $16.36 per ounce.<\/p>\n\n Palladium fell 0.7% to $1,524.59 per ounce, while platinum climbed 1.5% to $872.84.<\/p>\n\n