Gold holds steady ahead of Trump, Xi meeting

Gold prices held steady on Wednesday near one-month highs hit the session before, with appetite for riskier assets easing ahead of a meeting between leaders of the United States and China.

Focus is also turning towards the release later in the day of the minutes from the Federal Reserve's March meeting, with investors looking for any clues on the pace of further US interest rate rises.

Spot gold had edged up 0.1 per cent to $1,256.38 per ounce by 0744 GMT. US gold futures gained 0.1 per cent to $1,259.10.

Spot gold on Tuesday hit its highest since February 27 at $1,261.15, but failed to close above its 200-day moving average for the third time this year.

“This marks its third failure to break this level this year ... What is becoming clear is that golds direction is being set by the general US dollar direction and not by gold in isolation,” said Jeffrey Halley, senior market analyst at OANDA.

The dollar index fell 0.1 per cent to 100.470.

“Whether the Federal Reserve would raise rates in its June conference is not very certain. The market is waiting for more economic indicators from the US and speeches from Fed officials to assess the probability of a rate hike in June,” said Jiang Shu, chief analyst at Shandong Gold Group.

The Fed had raised interest rates in March and has indicated at least two more hikes this year.

Gold prices, however, have only risen nearly $60 since the rate hike in March as worries over US President Donald Trump's polices and elections in Europe have increased the metal's safe-haven appeal.

North Korea fired a ballistic missile on Wednesday from its east coast into the sea off the Peninsula, South Korea's military said, ahead of the summit between the United States and China.

US President Donald Trump meets Chinese President Xi Jinping on Thursday and Friday.

Asian stocks rose on Wednesday though the underlying sentiment was still cautious, with investors wary of taking big positions ahead of the meeting.

“The markets are waiting for the conference between the most important leaders in the world ... If it does not turn out in a positive way, we might see a weak US dollar and rising gold price,” Shu said.

Spot gold may retest resistance at $1,261.03 per ounce, as suggested by its wave pattern and a Fibonacci retracement analysis, Reuters technical analyst Wang Tao said.

Spot silver climbed 0.1 per cent to $18.30 an ounce after touching a one-month peak of $18.41 in the previous session. Platinum advanced 0.8 per cent to $966.60, while palladium edged up 0.1 per cent to $805.35.