Gold dips on dollar strength, cenbank meetings in focus

Gold prices slipped on Wednesday as a stronger dollar offset support from a pullback in global equities, while investors awaited monetary policy strategies from central banks this week.

Spot gold was down 0.3% at $1,925.97 per ounce by 0616 GMT. US gold futures fell 0.5% to $1,933.80.

"Traders in Asia will adopt a cautious tone, preferring to wait for New York to open and clearer evidence as to whether the USD rally and stock market sell-off will continue," said Jeffrey Halley, a senior market analyst at OANDA.

"However, a deeper correction below $1,900 cannot be ruled out if the dollar stays strong," he added.

Weighing on gold's appeal, the dollar index rose to a near one-month high against its rivals.

But bullion found some support as Asian shares weakened, following a tech-led selloff on Wall Street on Tuesday that had forced investors to seek safe havens.

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Investors now await the outcome of the European Central Bank's policy meeting, due on Thursday. While no major policy moves are expected since it has acted aggressively to shore up the virus-hit economy, investors will watch out for its inflation forecasts.

Gold is used as a hedge against inflation and currency debasement.

The Bank of Canada's policy meeting is also on Wednesday, while the US Federal Reserve's meeting is scheduled for next week.

On the technical front, spot gold is expected to retest a support at $1,906 per ounce, a break below which could cause a fall to $1,880, said Reuters technical analysts Wang Tao.

Elsewhere, platinum was down 0.1% at $900.57 per ounce. On Tuesday, the World Platinum Investment Council changed its forecast for the market in 2020 from a surplus to a deficit.

Silver dipped 0.2% to $26.65 per ounce, while palladium rose 0.5% at $2,284.75.

Reuters