Gold eases as market prepares for Fed meeting outcome
* Could slip to $1,750-$1,770 on Fed plans, analyst says
* U.S. dollar, treasury yields lower
* China slowdown could hit silver consumption - analyst
By Nakul Iyer
July 26 (Reuters) - Gold edged lower on Monday as investors turned cautious in the run-up to a Federal Reserve policy meeting, overshadowing some support from a weaker dollar.
Spot gold XAU= was down 0.2% at $1,798.41 per ounce by 13:56 p.m. EDT, while U.S. gold futures GCv1 settled 0.1% lower at $1,799.20.
The U.S. central bank will begin its two-day policy meeting on Tuesday.
"The concern now is that we will get the first hints of not necessarily a rate increase but what kind of reductions the Fed envisions to its balance sheet, and that could be a trigger for rates to move higher," said Edward Meir, analyst with ED&F Man Capital Markets.
Meir, however, said that was unlikely to drive a sustained fall in gold, with the metal drawing support from a dovish European Central Bank, a currently accommodative Fed, large fiscal stimulus and higher inflation.
Both the ECB and Fed have suggested they will keep monetary policy accommodative for some time.
Yet Han Tan, market analyst at Exinity Group, said that if the policy-setting Federal Open Market Committee provides more details about tapering plans, gold could test the June lows of $1,750-$1,770.
Bullion's dip came despite a weaker dollar and a slight dip in benchmark U.S. Treasury yields.
Elsewhere, silver XAG= rose 0.2% to $25.22 an ounce.
"You might have to wait for a bit for a breakout in silver, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
"Silver relies a lot on infrastructure and the slowdown in China might impact the technology that silver demands in order to be consumed."
Floods in central China, especially in the industrial and transport hub city of Zhengzhou, have raised concerns over damage to the region's infrastructure.
Among other metals, platinum XPT= gained 0.8% to $1,070.11 an ounce and palladium XPD= was slightly up at $2,672.98.
Reporting by Nakul Iyer, Arundhati Sarkar and Bharat Govind Gautam in Bengaluru; Editing by Paul Simao and Pravin Char
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.