June 10, 2020 / 3:15 AM / a month ago

PRECIOUS-Gold gains as equity rally pauses ahead of Fed verdict

    * U.S. Fed policy decision due at 1800 GMT
    * Gold up for third straight session 
    * For an interactive graphic tracking the global spread,
open tmsnrt.rs/3aIRuz7
 in an external browser

 (Updates prices)
    By Brijesh Patel
    June 10 (Reuters) - Gold extended gains on Wednesday as
global equity markets eased after a recent rally, while
investors awaited the outcome of a Federal Reserve meeting
expected to shed light on the state of the U.S. economy and
potential further stimulus measures.
    Spot gold        was up 0.1% at $1,716.11 per ounce, as of
0702 GMT, after posting its best day in a month on Tuesday. U.S.
gold futures        rose 0.2% to $1,725.
    "We are seeing a fairly clear risk-off sort of dynamic in
the markets and I think that's been supportive for gold as
yields have fallen against that narrative over the past 24
hours," said DailyFx currency strategist Ilya Spivak.
    Strong momentum in global financial markets ebbed as doubts
about the global recovery from the coronavirus pandemic
returned. Further supporting gold, U.S. Treasury yields crept
lower.                  
    Investors adopted a cautious stance and are awaiting the
Fed's monetary policy statement due at 1800 GMT, followed by a
press conference from Chairman Jerome Powell.
    U.S. central bankers will also publish their first economic
projections since the pandemic set off a recession in February.
            
    "Gold traders would be looking to clues from the Fed as to
the reality of a V-shaped economic recovery or whether stock
market investors have gone ahead of themselves in assuming a
V-shaped recovery," Phillip Futures said in a note.
    "If the Fed paints a picture that is negative for Wall
Street, demand would shift back into gold."
    The Fed has slashed interest rates to near zero and rolled
out a raft of stimulus measures to limit the economic damage
from COVID-19.             
    Lower interest rates and widespread stimulus tend to boost
demand for bullion, which is often seen as a hedge against
inflation and currency debasement.
    Elsewhere, silver        gained 0.6% to $17.69 an ounce,
palladium        climbed 0.6% to $1,952.69, and platinum       
rose 0.2% to $838.74.

 (Reporting by Brijesh Patel in Bengaluru, Editing by Rashmi
Aich and Mark Potter)
  
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