Following a weaker dollar and dip in Asian stocks, Gold touched a four-week high ahead of key central bank meetings and the June 23 referendum on Britain's exit from the European Union. Spot gold rose 0.6 per cent to $1281.96 an ounce. Bullion earlier touched a session best of $1284.20 an ounce and US gold was up 0.7 per cent at $1285.10.
Head of research at Hong Kong's Wing Fung Financial Group, Mark To said, "The market is full of uncertainty over Brexit and also over the interest rate decision by FOMC as well as other regional concerns. Gold has been up and $1300 should be an immediate target at least for the coming week, with $1240 being the support level."
The US Federal Reserve, Bank of England, Swiss National Bank and Bank of Japan will all meet this week, and hold monetary policy steady against a backdrop of caution about the global economic outlook as well as the impact about a possible exit of the British community. The dollar fell to a one-month low against the yen and stood at 106.03 yen, down about 0.9 per cent. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.74 per cent to 893.92 tonnes last week, the highest since October 2013. Speculators raised their net long position in COMEX gold contracts in the week to June 7, and cut their bullish stance in silver, US Commodity Futures Trading Commission data showed. "Gold could push a little higher during the early part of the week, but we expect it to hit some turbulence, the day of the Fed meeting," said INTL FCStone analyst Edward Meir in a note. "That is when we expect the bank to signal that it is warming up to a rate increase for July," he said, adding a lack of a clear signal from the US central bank could lead to further gains in gold.
