January 14, 2019 / 12:57 AM / 6 days ago

PRECIOUS-Gold prices edge higher on expectations of Fed pause

BENGALURU, Jan 14 (Reuters) - Gold prices inched up on Monday, supported by expectations that the U.S. Federal Reserve will not raise rates this year, but the yellow metal faced a strong technical resistance at $1,300, keeping the bullion range-bound for the past couple of weeks.

FUNDAMENTALS

* Spot gold was up 0.2 percent at $1,289.50 per ounce, as of 0040 GMT.

* U.S. gold futures were steady at $1,289.90 per ounce.

* Market participants think that worries of slowing domestic and global growth as well as tame U.S. inflation will make Fed policymakers hesitant to raise interest rates in the world’s largest economy.

* The central bank had the ability to be patient on monetary policy given stable price measures, U.S. Federal Reserve Chairman Jerome Powell said last week, and he downplayed predictions from policymakers suggesting interest rates would be raised twice more this year.

* Asian shares camped near 1-1/2-month highs on Monday as investors kept a wary eye on looming Chinese trade data on increasing signs a slowdown in the world’s second-biggest economy is dragging on global growth.

* Markets awaited trade data from China later in the day, with recent signs Asia’s largest economy was losing momentum and the government planning to lower its 2019 economic growth target.

* UK Prime Minister Theresa May must win a vote in parliament on Tuesday to get her Brexit deal approved or risk a chaotic exit for Britain from the European Union. The numbers are not in May’s favour and her chances of winning the vote look extremely slim.

* Meanwhile, investors were also worried about a partial U.S. government shutdown over President Donald Trump’s demand for $5.7 billion to build a wall along the U.S.-Mexico border, which entered its 24th day on Monday, making it the longest shuttering of federal agencies in the U.S. history, with no end in sight.

* Physical gold premiums rose in China last week as investment demand firmed on worries over global growth and a softening dollar, though Indian buyers remained on the sidelines ahead of the wedding season.

* Global investors ploughed money back into stocks and bonds this week as they regained their appetite for risk, boosted by dovish comments from Federal Reserve Chairman Jerome Powell.

* South African gold mining company Sibanye-Stillwater said on Friday that its lenders had agreed to extend its debt covenants at the upper limit of its facilities. (Reporting by Nallur Sethuraman in Bengaluru, Editing by Sherry Jacob-Phillips)

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