(Corrects company name and designation of analyst in 11th paragraph
in Oct. 18 story)
* U.S. Fed minutes signal more rate hikes likely
* Dollar index rises to one-week high
By Vijaykumar Vedala
BENGALURU, Oct 18 (Reuters) - Gold prices held steady on Thursday
as a fall in Asian shares was offset by a stronger dollar, which
firmed after minutes of the Federal Reserve's September meeting
reinforced expectations of a tighter U.S. monetary policy.
Fed policymakers are largely united on the need to raise borrowing
costs further, minutes from their most recent policy meeting showed,
boosting expectations the committee will stick to its hawkish stance
on raising interest rates.
Spot gold was flat at $1,222.23 an ounce at 0746 GMT, staying
close to its highest since July 26 at 1,233.26 an ounce hit on Monday.
U.S. gold futures were down 0.2 percent at $1,225.20 an ounce.
"Gold is closely tracking both the U.S. dollar and equities,
more so the dollar," said Peter Fung, head of dealing at Wing
Fung Precious Metals in Hong Kong.
The dollar index rose to a fresh one-week high against a basket
of currencies on Thursday.
"When the debate is that how high you can push the interest
rate, it is going to leave a negative scar on the gold price in the
short term," Think Markets UK chief markets analyst Naeem Aslam
said in a note.
"However, there are higher chances of miscalculation here,
hence we do think that any drop in the gold price could be an
Higher U.S. interest rates tend to boost the dollar, putting
pressure on gold prices by increasing the opportunity cost of holding
Meanwhile, China's benchmark stock index skidded to four-year lows
and dragged Asian equities down on Thursday, as renewed fears of a
broadening economic impact from an escalating Sino-U.S. trade conflict
"Geopolitical and macroeconomic factors are still not
indicating exuberance and risk appetite returning to markets with full
throttle," said Sugandha Sachdeva, vice president of metals,
energy and currency research at Religare Broking Ltd.
Trade war concerns, recent tensions between the United States and
Saudi Arabia, and a hawkish Fed are among the factors likely to weigh
on appetite for riskier assets. This bodes well for gold as a hedge
against market volatility and a portfolio diversifier, she added.
Bullion was testing resistance at the 100-day moving average of
about $1,225. A convincing break above that is seen as a bullish sign
for investors who follow technical signals.
A bearish target zone of $1,208-$1,217 per ounce remains unchanged
for spot gold, following its failure to break a strong resistance at
$1,235, according to Reuters technical analyst Wang Tao.
In other metals, silver fell 0.7 percent to $14.51 per ounce,
platinum was up 0.1 percent at $832.50 per ounce, and palladium
was up 0.3 percent at $1,072.0.
(Reporting by Vijaykumar Vedala in Bengaluru; editing by Richard
Pullin and Sunil Nair)
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