Gold eased on Wednesday on overnight gains in U.S. equities, while a May Day lull gripped most of Asian markets ahead of a closely monitored Federal Reserve decision on the future trajectory of interest rates. Spot gold was down 0.2 percent at $1,280.24 per ounce, as of 0315 GMT. U.S. gold futures fell 0.3 percent to $1,281.60 an ounce. Having been weighed down earlier by slightly overcast findings from Chinese business surveys, global shares edged higher on Tuesday, after U.S. President Donald Trump agreed with Democratic leaders to spend $2 trillion on infrastructure. Investors also gained impetus from signs of bettering relations between the United States and China with White House Chief of Staff Mick Mulvaney stating that their trade dispute will likely be resolved "one way or the other" in the next two weeks. Given the strength in equity markets and economic data from far and wide, "there is no need for inflation hedges in the gold market," said Michael McCarthy, chief market strategist, CMC Markets. "However, the pulling back of the U.S. dollar from recent highs over the last few sessions have been broadly supportive of gold." Euro zone reported stronger-than-expected economic growth for the first quarter, thereby dispelling some pessimism over the euro and jolting the economic bloc's common currency higher against the dollar. Many Asia financial markets are shut for a May Day holiday on Wednesday. Most market players also look to the culmination of a two-day meeting by the U.S. Federal Open Market Committee (FOMC), which will likely determine the path of interest rates in the future, at least for this year. "There has been some speculation that the recent strong GDP and employment data in the U.S. might see the Fed signal a more hawkish stance. While I do expect the Fed to acknowledge the strong numbers, I don't think they'll shift their stance at all," CMC Markets' McCarthy added. Interest rates have a proportional relationship with the dollar, and thereby, determine the opportunity cost of holding gold. Elsewhere, silver dipped 0.2 percent to $14.91 per ounce, while platinum prices were largely unchanged at $885.91. Palladium, on the other hand, fell 0.9 percent to $1,375.57 an ounce. Source: Reuters
