Gold steadies on hopes of Fed’s rate hike pause

FUNDAMENTALS

* Spot gold held its ground at $1,961.09 per ounce by 0016 GMT. U.S. gold futures were up 0.2% to $1,977.30.

* The dollar index was flat after falling on Monday, while the yield on 10-year Treasuries eased to 3.683%. A softer dollar makes greenback-priced bullion less affordable for overseas buyers.

* A survey from the Institute for Supply Management showed the U.S. services sector barely grew in May as new orders slowed, pushing a measure of prices paid by businesses for inputs to a three-year low, which could aid the Fed’s fight against inflation.

* Traders have priced in an 81.7% chance that the Fed will hold interest rates at its June 13-14 policy meeting, according to CME Group’s FedWatch tool.

* Non-interest-bearing bullion tends to become less attractive in a high interest rate environment. * Investors are bracing for a wave of U.S. government bond issuance as the Treasury plans to refill its depleted coffers quickly after the recent suspension of the debt limit.

* Indicative of sentiment, SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.15% to 939.56 tonnes on Monday from 938.11 tonnes on Friday.

* Elsewhere, the Reserve Bank of Australia delivers its latest interest rate decision on Tuesday, undoubtedly the centerpiece event for Asian and Pacific markets but potentially of interest to U.S. Fed watchers too.

* Spot silver eased 0.1% to $23.5595 per ounce, platinum fell 0.2% to $1,028.03. Palladium was little changed at $1,413.10 after dipping in the previous session. DATA/EVENTS (GMT) 0430 Australia RBA Cash Rate June 0600 Germany Industrial Orders MM April 0600 Germany Manufacturing O/P Cur Price SA April 0600 Germany Consumer Goods SA April 0830 UK All-Sector PMI May