June 8, 2020 / 10:32 AM / 24 days ago

PRECIOUS-Gold rises after steep fall as focus turns to Fed meeting

* SPDR gold holdings dipped on Friday

* Speculators cut bullish positions in COMEX gold

* For an interactive graphic tracking the global coronavirus spread, open tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)

By K. Sathya Narayanan

June 8 (Reuters) - Gold rose on Monday, helped by technical buying after the previous session’s steep fall, while investors await the U.S. Federal Reserve’s monetary policy meeting following a surprise rise in employment numbers.

Spot gold firmed by 0.4% to $1,692.12 an ounce at 1224 GMT. U.S. gold futures rose 0.8% to $1,696.80.

“The break below $1,700 on Friday is once again attracting some demand from investors, who have been waiting on the sidelines for a correction,” said Saxo Bank analyst Ole Hansen.

Bullion fell as much as 2.4% to $1,670.14 on Friday, its lowest in a month, after an unexpected rise in U.S. employment data increased hopes for a swift recovery in the global economy and lifted appetite for riskier assets.

Market participants are now waiting for the U.S. Central Bank’s two-day policy meeting, which ends on Wednesday, but have stopped pricing in the possibility of negative interest rates after Friday’s jobs report.

However, Commerzbank analysts expect gold to remain well supported by the wider economic backdrop, which points to zero interest rates for the foreseeable future, as does an inflation rate sitting below the Fed’s target.

Gold tends to gain when interest rates are low, which reduces the opportunity cost of holding non-yielding bullion. Gold is also seen as a hedge against inflation.

Meanwhile, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, dipped 0.4% on Friday. Speculators also cut their bullish positions in COMEX gold in the week to June 2.

The Perth Mint’s sales of gold and silver products tumbled in May from the previous month, the refiner said on Monday, as hopes of a quick global economic recovery dented safe-haven demand for precious metals.

In other precious metals, spot silver advanced 1.6% to $17.65 an ounce, platinum gained 0.1% to $836.93 and palladium eased by 0.1% to $1,951.06. (Reporting by K. Sathya Narayanan in Bengaluru Editing by David Goodman)

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