An employee arranges one kilogram gold bars for a photograph at the YLG Bullion International Co. headquarters in Bangkok, Thailand, (Photographer: Dario Pignatelli/Bloomberg)

Gold Little Changed as Traders Await Fed, U.S.-China Meeting

(Bloomberg) -- Gold traded little changed after touching an eight-month high as investors awaited clues about the outlook for U.S. monetary policy and the outcome of trade talks between the world’s two biggest economies.

Federal Reserve Chairman Jerome Powell will hold a news conference later Wednesday after the central bank’s inaugural rate-setting meeting of 2019. The U.S. and China are sitting down for the first of two days of discussions aimed at finding a solution to a trade war that’s cast a shadow on both economies.

‘‘Mr. Powell would have to try hard to ward off any of his hawkish stance in the midst of the ongoing trade war between the US and China. In addition, we also have a great deal of pessimism about global growth,” Naeem Aslam, chief market analyst at Think Markets U.K. Ltd., said in an emailed note. ‘‘If traders smell anything hawkish, then there could be a strong sell-off in the gold price.’’

Gold Little Changed as Traders Await Fed, U.S.-China Meeting

Gold is up more than 2 percent this year and set for a fourth straight monthly gain, while a gauge of the dollar is down for a third month. The metal is seeing renewed interest as a store of value as investors weigh prospects of fewer U.S. rate hikes this year and track signs of slower global growth. Bloomberg Economics’ early indicator showed China’s economy cooled further in January, while companies like Apple Inc. and Caterpillar Inc. are feeling the pain.

The delay of U.S. government data after the partial shutdown, as well as the negotiations over Britain’s Brexit deal, have also added to uncertainty in financial markets.

While China and America are holding talks this week, the U.S.’s criminal charges against China’s Huawei Technologies Co. have fueled tensions. That reduces the prospects of any major deal, according to John Sharma, an economist at National Australia Bank Ltd.

‘Provide Support’

“Moreover, with easing economic activity, the possibility of further rate hikes remains less assured than it was in 2018, which will likely provide support to gold,” Sharma said in an email. “Investors are likely to follow Powell’s comments on the outlook for the economy and, by extension, the likelihood, or not, of future rate rises.”

Investor sentiment in gold remains strong, with holdings in bullion-backed exchange traded funds at the highest since April 2013 after about 61 tons were added this year.

Spot gold fell 0.1 percent to $1,310.48 an ounce at 1:38 p.m. in New York, after touching $1,315.99, the highest since May. Gold futures for April delivery rose less than 0.1 percent to settle at $1,315.50 an ounce on the Comex in New York.

In other precious metals, silver traded at the highest since July. Palladium also advanced, while platinum was little changed.

©2019 Bloomberg L.P.