Gold prices steadied in a relatively tight range on Monday as investors awaited policy cues from the Federal Reserve's meeting this week, while deficit-stricken palladium scaled a record peak.
"The (gold) market just wants to get past FOMC to see what they have to say about inflation before it does make a move in either direction," said Bob Haberkorn, senior market strategist at RJO Futures. Traders would also focus on the U.S. central bank's long-term outlook on interest rates and "their plan of action on short-term rates," Haberkorn added. The two-day Fed meeting is scheduled to begin on Tuesday, with investors' attention focused particularly on what Fed Chair Jerome Powell will say in his post-meeting news conference on Wednesday. The dollar and U.S. Treasury yields were steady.
Bullion has dropped about 6% so far this year, mostly pressured by rising U.S. yields. "A break above the $1,800 level, however, may probably require the 10Y yield to trade below 1.55%," analysts at OCBC said in a note. Meanwhile, palladium extended its record-setting streak, rising 1.8% to $2,906.03 an ounce after earlier hitting an all-time high of $2,941.
The metal, used in emissions-reducing catalysts in automobiles, has risen about 19% so far this year.
"The (palladium) price is finding tailwind from the prospect of a renewed supply deficit," Commerzbank analysts said in a note.
"This (higher price) is the result of robust demand from the automotive industry due to tougher emissions regulations for cars with combustion engines coupled with reduced supply." Silver rose 0.5% to $26.13 per ounce, while platinum edged 0.2% higher to $1,232.12.