By Zandi Shabalala
LONDON (Reuters) - Gold held steady on Thursday as the dollar weakened after minutes from a U.S. Federal Reserve meeting suggested that the central bank could take a more cautious approach to interest rate increases.
Fed policymakers had agreed at the meeting that they should hold off from raising rates until it is clear that a recent U.S. economic slowdown is only temporary, though most said an increase is coming soon.
Higher interest rates tend to boost the dollar and push bond yields up, increasing the opportunity cost of holding non-yielding bullion and thereby pressuring gold prices.
Spot gold was virtually flat at $1,257 an ounce at 1354 GMT, clinging to Wednesday's 0.6 percent gain, while U.S. gold futures were up 0.3 percent at $1,256.
Capital Economics analyst Simona Gambarini said that gold's resilience could falter in the coming weeks, citing indications in the Fed minutes that tighter monetary policy is on the cards.
Federal fund futures implied that traders believe there is an 83 percent probability that the Fed will raise rates by a quarter of a percentage point at its June meeting, according to CME Group's FedWatch tool.
Expectations for U.S. interest rates to rise next month and potentially again later in the year have been a major factor in keeping gold prices pinned below chart resistance at $1,300.
But on the technical front, analysts see the price remaining stable in the next few sessions at least.
"After the golden cross of the 50-day moving average over the 200-day moving average and yesterday's firm buying early on towards $1,250, it looks as if prices are consolidating the recent rally," said Sucden Financial analyst Kash Kamal.
Support was near $1,250 an ounce and near-term resistance at $1,265, Kamal said.
Global equities, meanwhile, hit record highs on Thursday and the dollar index softened.[USD/][MKTS/GLOB]
In other commodities, oil prices fell as OPEC ministers met to decide how long to extend oil production cuts in an attempt to drain a global glut. [O/R]
Among other precious metals, silver rose 0.3 percent to $17.23 an ounce while platinum gained 1 percent to $953.20 and palladium rose 0.8 percent to $769.75.
On Wednesday silver gained nearly 1 percent and palladium fell by the same amount.
(Addtional reporting by Vijaykumar Vedala in Bengaluru,; Editing by David Goodman and Ed Osmond)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
