Gold prices edged higher on Thursday, supported by a softer dollar, although bullion hovered near the previous session’s lows as investors awaited cues from the US Federal Reserve after the Bank of Canada hiked its rates to a 22-year high.
Spot gold rose 0.4 percent to $1,946.47 per ounce after shedding 1 percent in the previous session. US gold futures edged 0.1 percent higher to $1,961.00.
Gold has support from expectations of Fed holding rates next week with prices stuck in the $1,930 to $1,985 range, and bullion could breach the upper range once the US central bank decision is out, said Ajay Kedia, director at Kedia Commodities in Mumbai.
The Fed will not raise interest rates for the first time in more than a year at its June 13-14 meeting, according to economists polled by Reuters.
The Bank of Canada on Wednesday hiked its overnight rate to a 22-year high of 4.75 percent, and markets and analysts immediately forecast yet another increase next month to ratchet down an overheating economy and stubbornly high inflation.
The US economy is strong amid robust consumer spending but some areas are slowing down, US Treasury Secretary Janet Yellen said, adding that she expects continued progress in bringing inflation down over the next two years.
US consumer inflation report for May, due on June 13, ahead of the Fed meeting, will provide investors with more clarity about the health of the world’s largest economy.
