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PRECIOUS-Gold muted as markets wait for U.S. Fed meeting

PRECIOUS-Gold muted as markets wait for U.S. Fed meeting

· 03/15/2021 23:55
PRECIOUS-Gold muted as markets wait for U.S. Fed meeting

Fed's two-day meeting starts later on Tuesday

Investors eye U.S. retail sales data at 1230 GMT

SPDR Gold Trust fell 0.2% on Monday

Adds comments; updates prices

By Diptendu Lahiri

- Gold prices were subdued on Tuesday as investors watched for a U.S. Federal Reserve meeting to tackle concerns over inflation and bond yields, although appetite for riskier assets grew on hopes of a swifter economic recovery.

Spot gold XAU= was flat at $1,731.89 per ounce at 0324 GMT, while U.S. gold futures GCv1 rose 0.1% to $1,730.40 per ounce.

"The Fed may address rising inflation concerns and even consider to push forward asset purchasing to compensate for the rising yields and that would be very positive for gold prices," said DailyFX strategist Margaret Yang.

"The overall sentiment is bearish, however, given the vaccine optimism and the passage of the stimulus packages," she added.

Fed policymakers, in the upcoming FOMC meeting, 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. nL1N2L82OT

"The strong recovery from the pandemic has been raising concerns that the Fed may lift interest rates earlier than expected... However, Chair Powell and his colleagues have been quite persistent that maximum employment is far away, allowing them to be patient," ANZ analysts wrote in a note.

Easing of the recent selloff on bonds has helped stabilise gold in recent days, ANZ said. US/

Putting further pressure on the non-yielding metal, Asian stocks were expected to open higher on Tuesday on faster recovery optimism. MKTS/GLOB

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

Data showed gold holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD, fell 0.2% to 1,050.32 tonnes on Monday. GOL/ETF

In other metals, silver XAG= fell 0.4% to $26.15, platinum XPT= was up 0.1% at $1,213.46 and palladium XPD= dropped 0.1 % to $2,385.61.

(Reporting by Diptendu Lahiri in Bengaluru; Editing by Rashmi Aich)

((Diptendu.Lahiri@thomsonreuters.com; within U.S. +1 651 848 5832; outside U.S. +91 80 6749 3683;; Reuters Messaging: diptendu.lahiri.thomsonreuters.com@reuters.net))