COMEX gold has hit a high of $1349.8/oz today, the highest level since April 2018. Gold hit 10-month high on back of weaker US dollar ahead of FOMC minutes today
The US dollar index trades little changed near 96.5 levels after a 0.4% decline yesterday. The US dollar is pressurized ahead of FOMC minutes and US-China trade talks.
Fed at its last meeting took a patient stance on interest rate hikes and flexible stance on bond reduction plan. FOMC minutes due today will give more clarity on Fed's monetary policy stance. Disappointing US economic data and continuing global uncertainty indicates that Fed may maintain patient stance on interest rate hikes. There are also talks that Fed officials are discussing ending the bond reduction plan.
The US dollar weakened also as progress in US-China trade talks dented safe haven demand. US-China negotiations resume Tuesday and are scheduled to continue through Friday in Washington. Meanwhile, the US is asking China to keep its currency stable as part of the negotiations.
It is likely that we may not see a major breakthrough this week amid possibility of US extending the March 1 deadline and amid possibility of a meeting between US and Chinese President.
ETF outflows however show weaker investor interest. Gold holdings with SPDR ETF fell to 792.446 tonnes, lowest since Dec.31.