US dollar, Federal Reserve in focus

A mark of 999.9 fine sits on hallmarked one kilogram gold bullion bars at the Valcambi SA precious metal refinery in Lugano, Switzerland, on April 24, 2018.

Stefan Wermuth | Bloomberg | Getty Images

Gold prices inched higher on Wednesday as the dollar weakened amid plans to ease major economies out of coronavirus lockdowns, while investors awaited any forward guidance from the U.S. Federal Reserve’s policy statement due later in the day.

Spot gold rose 0.1% to $1,708.53 per ounce by 0126 GMT. U.S. gold futures climbed 0.2% to $1,725.50 per ounce.

The dollar slipped, having touched a two-week low in the previous session, as the slowing spread of the coronavirus and moves to re-open economies supported the investor mood, ahead of major central bank meetings.

Many countries tiptoed out of lockdowns, while more parts of the United States looked set to restart business after restrictions to curb the spread of virus dented the economy.

Asian equities made cautious gains in early trade following mixed U.S. corporate earnings.

The Fed, which has responded to the current crisis by slashing interest rates, resuming bond-buying and backstopping credit markets, is scheduled to issue a policy statement at 1800 GMT and could begin to clarify how long it intends to leave rates near zero.

Gold tends to benefit from widespread stimulus measures as it is often seen as a hedge against inflation and currency debasement.

U.S. consumer confidence tumbled to near a six-year low in April as tough coronavirus restrictions sharply disrupted economic activity and threw millions of Americans out of work.

The U.S. coronavirus death toll reached a grim milestone on Tuesday, surpassing the number of American lives lost in the Vietnam War, as Florida’s governor met with President Donald Trump to discuss easing shutdowns.

Bank of Nova Scotia (Scotiabank) told staff on Tuesday it would close its metals business, drawing the curtain on one of the most venerable names in precious metals trading, two sources familiar with the matter told Reuters.

Palladium rose 0.3% to $1,921.81 an ounce and platinum climbed 0.2% to $773.67 per ounce, while silver fell 0.3% to $15.15 per ounce.

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