Gold price steadies ahead of US Fed meeting
New York (Oct 27) Gold edged up on Tuesday as caution ahead of a two-day Federal Reserve meeting weighed on risk appetite, but moves were muted as buyers awaited clues on the timing of a possible US interest rate hike.
Spot gold was up 0.4% at $1,167.20 an ounce at 2.50pm GMT, while US gold futures for December delivery were up $1 an ounce at $1,167.20.
Prices hit their highest since June earlier this month after a run of downbeat US data pushed back expectations for a rate hike, but they have retreated from that level as investors await more clarity on the timing of an increase.
Rising US interest rates would likely weigh on gold, as they increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
"The fact is that under the light of the recent US economic data, the Fed may be paralysed and they will perhaps have no other option but to talk down the US dollar (when they make their post-meeting statement) on Wednesday," said Ava Trade’s chief market analyst Naeem Aslam. If that happens, "gold will continue its path of least resistance, which for now is towards the upside," he said.
The dollar index dipped into negative territory on Tuesday as a private gauge of US consumer confidence unexpectedly fell in October, while world stocks fell as investors locked in gains from the past month before the Fed meeting.
"Gold is receiving some oxygen from the investor uncertainty generated by the perceived divisions at the Fed," HSBC said in a note. "The longer the uncertainty goes on, the more investors may turn to gold."
In an industry report on Tuesday, GFMS analysts at Thomson Reuters said gold is set to remain under pressure until there is more clarity on US rates.
Surging demand for coins and bars and a rise in buying by central banks pushed physical gold demand up 7% in the third quarter, the report showed, though the market remained in a surplus of 51 tonnes.
China’s net gold imports from main conduit Hong Kong jumped to a 10-month high in September, data showed on Tuesday. Net gold imports from Hong Kong rose to 97.242 tonnes last month, their highest since November 2014.
Silver was up 0.6% at $15.90 an ounce, while platinum was down 0.5% at $987.49 an ounce, and palladium was little changed at $678.50 an ounce.
Source: bdLive.sa
