LONDON,june 26: Gold edged higher in Europe on Monday despite a stronger US dollar as investors focused on inflation ahead of a meeting later this week where the US Fed is expected to hike interest rates.

“The consensus is for a 25-basis-point rise, but there is

some speculation that we may see a 50-point increase. That will weigh on gold from a currency perspective but increase the appeal of gold against inflation,” a trader said.

Spot gold was at $584.30/585.00 an ounce, compared with $582.80/583.50 late in New York on Friday, marking time under an intermediate overhead target at $590.00, within a much wider range, analysts said.

Gold’s gains were limited, however, by the dollar holding near two-month highs against the yen and euro.

The metal set a 26-year high of $730 an ounce on May 12.

James Moore of TheBullionDesk.com said that the market looks set to continue building a base within a broad $550-600 range.

Gold is sitting on the fence with inflation fears on one side and worries about growth on the other. It’s hard to say which way gold will land, a dealer said.

A member of the governing board of the Swiss National Bank told a bullion conference in Switzerland said that central banks are unlikely to drastically alter their gold reserves soon.

I doubt that in the foreseeable future, these national discrepancies related to gold reserves will diminish significantly, let alone disappear, Philipp M. Hildebrand said.

Gold, up 13 per cent this year, is of interest to investors as a hedge against an inflation-hobbled dollar.

Technical traders saw gold being capped around the 14-day moving average (MA) at about $585, while solid support was pegged near the seven-day MA of $579.

In other precious metals, silver was up three cents at $10.33/10.43 an ounce, against Friday’s New York level of $10.30/10.40.

Platinum edged up to $1,173/1,179 an ounce from $1,165/1,170 in New York. Sister metal palladium rose to $309/314 an ounce from $301/306.—

Reuters