Gold price inches lower ahead of US central bank policy meet

Gold prices eased on Tuesday, as investors turned to riskier assets on hopes of a quick economic recovery, while they awaited the outcome of a U.S. Federal Reserve policy meeting.

FUNDAMENTALS
Spot gold was little changed at $1,732.32 per ounce by 0108 GMT, while U.S. gold futures fell 0.05% to $1,728.20 per ounce.


Fed policymakers are set to forecast that the U.S. economy will accelerate at the quickest rate in decades in 2021, with unemployment dropping and inflation increasing, as the COVID-19 vaccine initiative ramps up and a $1.9 trillion relief package is dispersed among households.

Bullion was also pressured as the S&P 500 and Dow Jones Industrial Average closed at all-time highs on Monday. Asian stocks were set to open higher on Tuesday.

Longer-term U.S. Treasury yields fell on Monday, and the yield curve flattened.

Andrew Bailey, governor of the Bank of England, said he was more hopeful about the economy, "with a strong dose of caution," and a recent increase in interest rates in capital markets was consistent with the chances of recovery from the COVID recession.

Investors also eye the U.S. Commerce Department's February retail sales data due on Tuesday, following January's 5.3% surge.

SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings fell 0.2% to 1,050.32 tonnes on Monday from 1,052.07 tonnes on Friday.

Silver fell 0.2% to $26.22, platinum was down 0.1% at $1,211.91 and palladium dropped 0.1% to $2,385.23.

DATA/EVENTS (GMT)
0745 France CPI (EU Norm) Final MM, YY Feb
1000 Germany ZEW Economic Sentiment March
1000 Germany ZEW Current Conditions March
1230 US Retail Sales MM Feb
1315 US Industrial Production MM Feb
US Federal Open Market Committee starts two-day meeting on interest rates