Article Highlights

  • BOJ keeps monetary policy steady, Fed meeting begins Tues
  • Spot gold on track for second monthly decline
  • Silver climbed 1.2 pct, palladium up 4 pct so far in Oct
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Gold prices were largely unchanged on Tuesday after the Bank of Japan kept its monetary policy steady, with investors shifting their attention to other central bank meetings and economic events due this week.

Gold markets remained cautious ahead of a two-day U.S. Federal Reserve policy meeting beginning Tuesday, the likely announcement of the next Fed chair on Thursday and U.S. payrolls data on Friday.

Ongoing political unrest in Catalonia was also in focus, along with the Bank of England’s meeting this week to discuss interest rate policy.

Spot gold was little changed at $1,275.49 per ounce at 0724 GMT. It has shed about 0.3 percent so far in October, in what could be its second straight monthly decline.

U.S. gold futures for December delivery dipped 0.1 percent to $1,277.10.

The market is catching its breath for what will be a very data-heavy second half of the week,” said Jeffrey Halley, a senior market analyst with OANDA.

Gold itself appears to have lost any risk-aversion premium for now and is thus completely at the mercy of the nuances of the U.S. bond and stock market, and by default the U.S. dollar,” he added.

The dollar was down 0.1 percent against the yen after the BOJ’s decision to keep monetary policy steady even as it slightly cut its inflation forecast for the current fiscal year.

The greenback slipped 0.4 percent against a basket of currencies on Monday after reports that former aides of U.S. President Donald Trump, including former campaign manager, Paul Manafort, were charged by federal authorities probing Russian interference in the 2016 election.

The focus (for gold investors) is on the Fed meeting and the apparent transfer to the new chair next year. Everything else is secondary unless it moves the dollar much … Investors are really cautious going into that,” said ANZ analyst Daniel Hynes.

Trump is likely to pick Fed Governor Jerome Powell as the next head of the U.S. central bank, a source familiar with the matter said on Monday.

Powell is seen as being more dovish on monetary policy than other contenders for the post, especially compared to Stanford University economist John Taylor, who has been regarded as another top challenger for the position.

Spot gold may test resistance at $1,281 per ounce, a break above which could lead to a gain to the next resistance level at $1,286, according to Reuters technical analyst Wang Tao.

Among other precious metals, silver was flat at $16.83 an ounce. Platinum gained 0.2 percent to $918.35 an ounce, while palladium climbed 0.8 percent to $972.50 an ounce.

Silver has risen 1.2 percent, platinum about 1 percent, while has palladium gained 4 percent in October thus far.