Picture: 123RF - KTSDESIGN
Picture: 123RF - KTSDESIGN

Bengaluru — Gold prices traded in a narrow range on Thursday, after hitting a one-week high in the previous session, amid an easing dollar and as the markets awaited minutes from the US Federal Reserve’s June policy meeting later in the day.

Spot gold held steady at $1,255.59/oz as of 4.35am GMT. The metal touched a one-week high at $1,261.10 in the previous session and gained more than $20 from Tuesday’s low of $1,237.32/oz, its weakest since December 12.

US gold futures were up 0.3% at $1,256.70/oz.

The dollar index, which measures the greenback against a basket of six major currencies, was down 0.1% at 94.539.

"There’s not much incentive to move the market, it is very quiet this morning after the July 4 holiday. I don’t expect too much movement until the Fed minutes," said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.

Investors are awaiting the outcome of a two-day US Federal Reserve policy meeting to be announced at 6pm GMT.

In its June meeting the central bank had projected two more rate hikes in 2018 for a total of four. In June, US Fed chairman Jerome Powell said the central bank should continue with a gradual pace of interest rate rises amid a strong economy to balance its employment and inflation goals. Gold is highly sensitive to rising interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar in which the metal is priced.

"Gold, however, remains in a bit of a conundrum as political instability and escalating trade war triggers a buy signal, yet the steady US dollar strength continues to nip those ideas in the bud," said Stephen Innes, Asia-Pacific trading head at Oanda.

Asian stocks were shaky on Thursday while major currencies barely budged in early trade, as financial markets remained in a state of anxious uncertainty on the eve of a US deadline to slap tariffs on Chinese imports. The US is set to impose tariffs on $34bn in Chinese goods on July 6.

Spot gold might retrace to a support at $1,248/oz, as it had failed to break a resistance at $1,258, Reuters technicals analyst Wang Tao said.

Investors are also awaiting US nonfarm payrolls and unemployment data on Friday for further cues on monetary policy.

Among other precious metals, silver was little changed at $16.03/oz.

Palladium rose 0.2% to $947.90/oz while platinum was trading 0.2% higher at $841.90/oz.