Gold edged lower early Wednesday as the dollar firmed with investors awaiting hints on the U.S. Federal Reserve's monetary policy stance following the central bank's two-day meeting. The market is also looking forward to the impending naming of the next Fed chair, the Bank of England policy meeting on Thursday and more data, including U.S. payrolls figures on Friday. Spot gold was down 0.1 percent at $1,269.86 per ounce at 0356 GMT. U.S. gold futures for December delivery were nearly unchanged at $1,270.90. "Gold prices suffered under the weight of the stronger U.S.dollar. Investors' appetites has been relatively weak as the currency has rebounded amid reports that President Donald Trump was close to announcing tax cuts," ANZ said in a note. "However, investors also remain cautious ahead of Trump's announcement of a new chair for the Fed, as well as their monthly interest rate meeting." The Fed is scheduled to release its statement following its meeting on Wednesday at 2 p.m. EDT. "A rate hike in December is largely priced into markets. However, investors are looking for the Fed stance on monetary policy: in particular, the inflation outlook and how the Federal Reserve wishes to respond," said John Sharma, an economist with National Australia Bank. "In other words, whether they are likely to adopt a ‘wait and see' mode, or get ahead of the curve. The latter will, of course, be negative for gold." Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion. Speculation on the next Fed chair is weighing on gold prices, said Mark To, head of research at Hong Kong's Wing Fung Financial Group. "We are waiting for some big announcements, some important news. Once these announcements are done, volatility may increase," he added. Fed Governor Jerome Powell, seen as more dovish than other contenders for the post, has been favored to be named as the next Fed chair by Trump on Thursday. In the wider markets, the dollar edged higher against a basket of currencies, while Asian shares hit a 10-year high on Wednesday on the back of solid economic growth globally. Among other precious metals, silver gained 0.2 percent to $16.72 an ounce. Platinum was up 0.2 percent at $917.05 an ounce. Palladium, which marked a two-week high at $984.50 an ounce earlier in the day, was up 0.3 percent at $983.35 an ounce. Source: Reuters
