Gold steady on caution ahead of Fed meeting

US inflation expectations tumbled last month, with one key measure hitting its lowest level since early 2016, according to a Federal Reserve Bank of NY survey that could amplify the central bank's concern over a broad slump in prices.

Historically, the HKMA would buy Hong Kong dollars when the currency fell to 7.83, rather than waiting for it reach the 7.85 lower limit of the trading band.

The Federal Reserve is set to raise short-term interest rates Wednesday for the third time in six months - a vote of confidence in the American economy and especially in the resilience of the USA job market.

After starting the year running at a 1.8% annual rate, the core rate of the personal consumption expenditure index has softened to a 1.5% rate in April. Reselling those assets markets is tricky and many worry could have the inverse affect of depressing market prices and driving rates higher.

"The peg between GCC currencies and the United States dollar has, therefore, helped ensure that equities avoided much of the past currency volatility experienced by other emerging market economies", said Mr Khatoun.

The euro inched lower to $1.12. The Canadian dollar strengthened to hit two months high against its USA counterpart on Tuesday as comments by Bank of Canada Governor Stephen Poloz supported the view that the central bank could raise interest rates sooner than previously thought.

METALS: Gold slipped $2.50 to $1,268.90 an ounce.

Sterling was fractionally lower at $1.266 ahead of a Bank of England meeting on Thursday at which the benchmark rate is expected to remain at 0.25 percent.

This will likely mark the third quarter-point rate hike announced by Fed chair Janet Yellen since last December.

The IMF foresees the global economy growing 3.5 percent this year - up from 3.1 percent in 2016 but well below the 4 to 5 percent growth typical of the mid-2000s. Instead, markets have taken account of recent softness in inflation and lengthened the odds on a further move this year. With the Fed widely expected to raise interest rates at its two-day meeting that ends on Wednesday, the focus will be on any fresh hints on the pace of further tightening in the months to come and next year, and any further details on its plans for trimming its balance sheet.

Most of the Asian stocks are losing as they enter the week; tech giant Samsung Electronics Co. and Tencent Holdings Ltd. dwindles down as they manage to catch the USA currents of technology selloff spread.

Even with the growing doubts, as of last Friday, futures markets were forecasting a better-than- 99-per cent chance of a rate hike at this week's Fed meeting. The Dow Jones industrial average lost 0.2 percent to 21,235.67, and the Nasdaq composite dropped 0.5 percent to 6,175.46.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.21 percent.

U.S. Attorney General Jeff Sessions will testify in public to the Senate Intelligence Committee later today to explain his role in the Russian Federation investigation. India's S&P BSE Senex was also down by -0.6%; the India equity has been struggling for the past two weeks as tech stocks fumbles.

Benchmark Brent crude LCOc1 retreated 47 cents to $48.25 a barrel while US light crude CLc1 shed 52 cents to $45.94.

Oil prices edged higher on Tuesday after OPEC detailed supply cuts around the world, but the cartel also said overall production rose in May, and crude stayed well below $50 a barrel despite the modest recovery.

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