Gold Inches Higher on Softer Dollar as Attention Turns to Fed Meet

FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo
FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo
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Gold Inches Higher on Softer Dollar as Attention Turns to Fed Meet

FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo
FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo

Gold prices gained on Monday on a softer dollar, while investor caution set in ahead of the US Federal Reserve's policy meeting where the central bank is expected to deliver a third rate cut this year and provide hints regarding its 2025 outlook.

Spot gold was up 0.6% at $2,663.23 per ounce as of 1222 GMT. US gold futures rose 0.3% to $2,682.50.

The dollar index fell 0.1%, retreating from more than a two-week high reached on Friday, making dollar-priced bullion more affordable for holders of other currencies.

"Market participants are awaiting the FOMC meeting and any guidance on future rate cuts," said UBS analyst Giovanni Staunovo. "We continue to expect a 25-bps cut this week and four more cuts next year."

The Fed is anticipated to lower interest rates by a quarter point at its two-day policy meeting, which starts on Tuesday. It will also offer updated projections on potential rate cuts for 2025 and possibly 2026.

"This (rate cuts) should support further investment demand and lift the gold price to $2,900/oz by mid next year," Staunovo said.

Non-yielding bullion tends to shine in a lower interest rate environment and during economic or geopolitical uncertainty.

Israel said on Sunday it plans to double its population on the occupied Golan Heights, citing Syrian threats despite the moderate tone of rebels who ousted Assad last week.

Gold and silver demand should remain strong until the US and global growth puts in a floor, with buying as a hedge against equity downside, that is until US interest rates get to neutral, Citi said in a note, adding that it sees "gold and silver peaking around 4Q'25/1Q'26."

Besides the FOMC interest rate decision, this week would also see key data releases including GDP figures, the PCE index report and the consumer sentiment (final) reading.

Spot silver rose 0.3% to $30.64 per ounce, platinum edged 0.2% lower at $922.84, while palladium was down 0.2% at $950.11.



Virgin Group Says Aims to Raise $900 Million for Rail Service Bid

FILE PHOTO: Passengers wait at the Eurostar terminal in St. Pancras International Station, in London, Britain, July 26, 2024. REUTERS/Leila Dougan/File Photo
FILE PHOTO: Passengers wait at the Eurostar terminal in St. Pancras International Station, in London, Britain, July 26, 2024. REUTERS/Leila Dougan/File Photo
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Virgin Group Says Aims to Raise $900 Million for Rail Service Bid

FILE PHOTO: Passengers wait at the Eurostar terminal in St. Pancras International Station, in London, Britain, July 26, 2024. REUTERS/Leila Dougan/File Photo
FILE PHOTO: Passengers wait at the Eurostar terminal in St. Pancras International Station, in London, Britain, July 26, 2024. REUTERS/Leila Dougan/File Photo

British billionaire Richard Branson's Virgin Group aims to raise 700 million pounds ($900 million) to fund its plan to launch cross-channel rail services as it looks to compete with Eurostar, the company said on Sunday.

Virgin, which used to operate intercity train services in Britain, plans to launch services that would connect London with Paris and Brussels. It would also extend to Amsterdam in the future.

Virgin Group intends to raise 300 million pounds in equity and 400 million pounds in debt, the company told Reuters, confirming a report in Financial Times, which was the first to report on the news.

It also plans to be a cornerstone equity investor in the project.
Virgin's plans are for a high-frequency service, which would be the first direct rival to Eurostar's 30-year-old network and could launch as soon as 2029, the company said.
"The cross-Channel route is ripe for change and would benefit from competition," a spokesperson said in an emailed statement.
"While Virgin is not committing to launching a service just yet, we are seeking investment from likeminded partners to invest alongside Virgin and we are delighted with the progress made so far," the company said.
Eurostar told the FT it welcomed the development of rail services in Europe, adding that "competition in the high-speed rail sector is another example of the growing demand for rail transport in Europe."
Eurostar did not immediately respond to a Reuters request for comment.