<h3>Gold little changed ahead of rate decisions and US data</h3>
By IBT Staff Reporter On
Gold little changed ahead of rate decisions and US data
Gold steadied on Thursday trading as investors wait to get clues regarding global recovery in the second half of the year.In the previous session, gold shed $7.10 or 0.46% after closing at $1537.40 an ounce, while gold price was setin London at $1537.75 per ounce inclining from $1535.50 during the AM fixing.Investors are wary of taking long positions on gold, especially after the Fed Chairman comments which did not include the launch of a third round stimulus despite the slowdown seen in the recent US data.After the introduction of QE2 by the Fed, gold along other commodities rose to record high on inflation fears, thus with the end of the program this month the dollar may gain some strength as its supply will decrease which in turn may affect gold.The recent data from major economies showed that global recovery is losing momentum after the strong start in the first three months, yet expectations by many central banks show that recovery would pick up in the second half of the year.In addition, the rise in inflation rate prompted many countries, including China, to raise interest rate to curb inflation. Thus, with the decline in inflation gold may lose merit as a hedge against inflation if the tightening did not affect growth as gold may benefit from another side as a safe haven.Inflation pressure started to ease as oil prices retreated from a high of $114.16 a barrel in April to trade below $100 this month. Yesterday, OPEC members agreed to hold production where they will meet again within three months to set quotas. Yet, Saudi Arabia, the largest oil producer in OPEC, said it may act solely through increasing production as Saudi officials see that a price around $80 a barrel is reasonable to help global demand to rebound after the slowdown in major economies.In the FX market, the dollar slipped against a basket of major currencies as the dollar index fell to a low of 73.69 compared with the day's starting level of 73.88.Today, both ECB and BoE are expected to hold their monetary stance unchanged in June, where expectations refer to a possible interest rate hike by the ECB in July.Later in the day, the US will release trade data and initial jobless claims which are expected to be watched after the wave of vile data released over the past few weeks.Spot gold is traded at $1536.50 an ounce after reaching a high of $1538.65 and a low of $1533.72.Among other precious metals, sliver edged up to $39.95 from the day's opening of $36.73, platinum rose to $1820.00 from $1817.20 and palladium hovered around $804.70 near the day's starting level, as of 07:35 GMT.