Gold Inches Down Before Fed Minutes

FRANKFURT (Aug 21)  Precious-Gold inched down on Wednesday trading session ahead of Fed minutes of July’s monetary decision which will provide clues about the Fed’s intention to taper stimulus.

Gold is currently trading around $1364.097 after touching a high of $1374.10 and a low of $1364.23.

The shiny metal fell from two-month high this week after hitting resistance at $1370 which represents Daily SMA 100. As a downside correction after last week’s 4.6% rise, where investors remain uncertain regarding the Fed’s future plans for stimulus.

The Fed has mentioned that it could start tapering stimulus next month should labor and housing data show progress.

The main focus today will be on Fed minutes for July meeting as it will show whether there is consensus between policymakers regarding the withdrawal of the $85 million monthly bond purchases.

Later in the day, U.S. existing home sales may show a rise to $5.15 million in July from a prior of $5.08 million.

The yellow metal hit its all-time high in 2011 on the back of large spending by the central banks. Therefore, a scale back by the Fed to stimulus is likely to reduce the appeal of the metal as an inflation hedge.

The dollar index, which tracks the dollar movements versus a basket of major currencies, is currently hovering around 81.10 after opening trading today at 80.94.

Crude oil for October’s delivery is trading lower for a third straight session around $104.57 a barrel, falling from a high of $105.34.