SINGAPORE - Gold edged up on Wednesday after hitting a more than four-month low in the previous session, while traders remained cautious ahead of the conclusion of a Federal Reserve meeting that may stoke expectations for a mid-year hike in US interest rates.
Many expect the Fed officials, who started a two-day policy meeting on Tuesday, to drop the word "patient" from their forward guidance on interest rates, potentially paving the way for a rate hike around June, the first since 2006.
But HSBC said upcoming US inflation data may not be strong enough to prompt a rate hike in June, and policymakers could wait until September before taking any action.
"The removal of the word "patient" from the FOMC's (Federal Open Market Committee) guidance may initially pressure gold prices, especially if it helps to further boost the dollar," HSBC analyst James Steel told clients in a note.
"That said, if a rate rise does not occur in June or if inflation data does not move up to the 2 percent target level, then investor sentiment toward gold may change for the positive and prices may trade higher."
Spot gold was up 0.2 percent at $1,151.10 an ounce by 0220 GMT, recovering slightly from Tuesday's trough of $1,142.86 - its lowest since Nov. 7.
Gold, a non-interest yielding asset, has dropped nearly 3 percent this year on expectations for a US rate hike.
US gold for April delivery gained 0.2 percent to $1,150.40 an ounce.
While the US economy has been strengthening as evidenced by a firming labour market, the housing sector remained weak, suggesting the Fed is unlikely to engage in an aggressive hiking cycle after an initial rate increase.
Data on Tuesday showed US housing starts plunged to their lowest level in a year in February.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings dropped 0.4 percent to 747.98 tonnes on Tuesday. – Reuters
About 92 News HD Live Main TV Channel of Pakistan:
92 News (also known as 92 News HD Plus (Channel 92) is a conservative Urdu language TV channel based in Lahore, Pakistan.
Mian Muhammad Hanif is the chairman of the channel.
This TV channel is a subsidiary of Madinah Group under Galaxy Media Group.
The channel's name, 92, is to celebrate the 1992 Cricket World Cup won by Pakistan. The number 92 is also the telephone country calling code of Pakistan, which is another major reason behind the channel's name.
92 News HD is Pakistan’s first HD Plus News Channel. Aims to bring credible & responsible News & important stories from Pakistan & around the World
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