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Gold Prices Little Changed After Trump-Kim Agreement, Fed Rate Hike Ahead

Published 12/06/2018, 15:43
Updated 12/06/2018, 15:50
Gold shows caution as Fed policy meeting gets underway
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Investing.com - Gold prices were little changed in midmorning trade tracking caution also seen in the dollar as the Federal Reserve’s two-day policy meeting kicked off on Tuesday.

At 10:40AM ET (14:40GMT), gold futures for August delivery on the Comex division of the New York Mercantile Exchange slipped 70 cents, or 0.05%, to $1,302.50 a troy ounce.

On the geopolitical front, U.S. President Donald Trump and North Korean leader Kim Jong Un pledged to work toward complete denuclearization of the Korean peninsula, while Washington committed to provide security guarantees for its old enemy.

At the end of their historic summit in Singapore, Trump and Kim signed an agreement to work toward complete denuclearization and a lasting "peace regime" on the Korean Peninsula.

On the economic agenda, inflation in the U.S. accelerated at a faster-than-expected pace in May, although the data appeared to do little to pump expectations for the Fed to take a more aggressive stance on policy tightening.

Core CPI, a key gauge of underlying consumer price pressures that excludes food and energy costs, registered an annualized increase of 2.2%, in line with expectations.

That most recent reading of inflation comes as the Fed kicks off its two-day policy meeting. Markets expect the U.S. central bank to hike interest rates by 25 basis points at the end of its meeting on Wednesday, bringing federal funds rate target to a range between 1.75% and 2.00%.

With the move more than 90% priced in, market participants are focusing on whether the Fed will hint at the prospect of four rate hikes in 2018.

In other metals trading, silver futures lost 0.1% at $16.930 a troy ounce by 10:41AM ET (14:41GMT).

Palladium futures and sister metal platinum were unchanged at $1,016.30 and $906.30, respectively.

In base metals, copper slipped 0.03% to $3.256 a pound.

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