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PRECIOUS-Gold steady as hopes of lockdown easing lifts stocks; focus on Fed

Logo - The Daily Drill - Digging Deep for precious metal news

(Updates prices) * U.S. Fed policy decision due at 1800 GMT * Worldwide coronavirus cases at over 3.1 million * For an interactive graphic tracking the global spread, open https://tmsnrt.rs/3aIRuz7 in an external browser By Brijesh Patel April 29 (Reuters) - Gold prices were little changed on Wednesday as optimism over economies easing coronavirus lockdowns lifted other assets and investors awaited the U.S. Federal Reserve's monetary policy decision later in the day. Spot gold was steady at $1,708.09 per ounce by 1202 GMT. U.S. gold futures edged 0.1% up to $1,723.50 per ounce.

"A few countries are planning to ease lockdown measures, this is pressuring gold a bit at the movement," Julius Baer analyst Carsten Menke said. "There is sufficient fundamental support from safe-haven demand, but no panic-buying, although the uncertainty regarding the virus and also the economy remains too high for gold to really lose ground. All in all, this keeps prices around the $1,700 level." World shares eked out gains on plans for a gradual easing of coronavirus curbs, while better-than-expected corporate earnings and a rise in oil prices further lifted sentiment. Investors across the world are hoping that the pandemic may be peaking as parts of the United States, Europe and Australia gradually ease restrictions.

New Zealand this week allowed some businesses to reopen. All eyes are on the Fed, which is scheduled to release a statement at 1800 GMT, followed by a news conference by Chairman Jerome Powell. The European Central Bank meets on Thursday. The Fed has cut interest rates, resumed bond-buying and backstopped credit markets in response to the economic damage caused by the novel coronavirus, which has infected more than 1 million people in the United States. Also on investors' radar, quarterly U.S. gross domestic product numbers will be released at 1230 GMT, with consensus forecasts for a contraction of around 4%.

Gold, considered a safe investment during times of political and financial uncertainty, tends to benefit from widespread stimulus measures as it is often seen as a hedge against inflation and currency debasement. "In a world of gnarly economic and real-life news flows, gold declines are likely to be limited, given the favorable opportunity cost to warehouse yellow metal with interest rates at zero across the board," said Stephen Innes, chief market strategist at financial services firm AxiCorp, in a note. Among other precious metals, palladium gained 1.5% to $1,944.96 an ounce, platinum rose 0.6% to $776.18. Silver edged 0.1% higher to $15.21 per ounce. (Reporting by Brijesh Patel in Bengaluru; editing by Elaine Hardcastle and David Evans)

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