By Shreyansi Singh
(Reuters) – Gold prices edged up on Wednesday as a weaker dollar eclipsed optimism over plans for a gradual easing of coronavirus curbs, while investors awaited a policy decision by the U.S. Federal Reserve due later in the day.
Spot gold rose 0.2% to $1,711.31 per ounce by 0539 GMT after three straight sessions of falls. U.S. gold futures climbed 0.3% to $1,727.50 per ounce.
Making greenback-denominated gold more appealing to investors using other currencies, the dollar eased as the slowing coronavirus’ spread and moves to re-open economies boosted risk appetite, though there was caution ahead of the Fed decision.[USD/]
“There’s a movement out of the dollar because there’s a lot of uncertainty around an event like the Fed meeting, and that’s supporting a little bit of a lift in gold on an intra-day basis,” said IG Markets analyst Kyle Rodda.
“We’ve got a lot of major events on the economic and corporate calendar in the next few days,” Rodda said, adding that this was leading to heightened risks in the equities market.
Asian shares rose for a third straight session in cautious trading and oil prices jumped on hopes demand will pick up as countries look to ease restrictions.
Many countries tiptoed out of lockdowns and more parts of the United States looked set to restart businesses.
“With central banks increasing liquidity in financial markets, low interest rates and rising money supply are all factors that are bullish for gold in the longer term,” Phillip Futures said in a note.
The Fed has slashed interest rates, resumed bond-buying and backstopped credit markets. Its statement on Wednesday could begin to clarify how long it intends to leave rates near zero.
Gold tends to benefit from widespread stimulus measures as it is often seen as a hedge against inflation and currency debasement.
U.S. consumer confidence tumbled to near a six-year low in April as restrictions disrupted economic activity and threw millions of Americans out of work.
Drawing the curtains on one of the most venerable names in precious metals trading, Bank of Nova Scotia (Scotiabank) told staff on Tuesday it would close its metals business, two sources familiar with the matter told Reuters.
Palladium rose 3% to $1,974.33 an ounce platinum gained 0.4% to $775.18 per ounce, silver was up 0.1% to $15.20 per ounce.
(Reporting by Shreyansi Singh in Bengaluru; editing by Uttaresh.V and Subhranshu Sahu)