Gold Trading Around $1357 As Fed Minutes Eyed
LONDON (Aug 20) Precious-Gold dropped for a second straight session on Tuesday ahead of Fed minutes of July’s monetary decision, due tomorrow, which will provide clues about the Fed’s intention to taper stimulus.
Gold is currently trading around $1357.05 after touching a high of $1369.63 and a low of $1352.21.
The shiny metal fell from two-month high yesterday, after hitting resistance at $1370 which represents Daily SAM 100. A downside correction after last week’s 4.6% rise, and 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 improvement.
The main focus this week will be on Fed minutes for July meeting as well as U.S. home sales and jobless claims reports, where trading this week is still choppy amid the absence of important fundamentals from major economies.
The yellow metal may receive a blow if the Fed started lowering its monthly bond purchases of $85 million as it will reduce the metal’s appeal as a hedge against inflation, noting that it hit its all-time high in 2011 on the back of the large spending by the central banks.
The final say for the option of tapering stimulus will be in September’s FOMC meeting, where the NFP report for August is highly expected to weigh on the Fed’s decision.
Gold is meanwhile benefiting from the drop in the U.S. dollar against a basket of major currencies.
The dollar index is currently hovering around 81.27 after hitting a peak of 84.97 in July.
Gold is currently trading around $1357.05 after touching a high of $1369.63 and a low of $1352.21.
The shiny metal fell from two-month high yesterday, after hitting resistance at $1370 which represents Daily SAM 100. A downside correction after last week’s 4.6% rise, and 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 improvement.
The main focus this week will be on Fed minutes for July meeting as well as U.S. home sales and jobless claims reports, where trading this week is still choppy amid the absence of important fundamentals from major economies.
The yellow metal may receive a blow if the Fed started lowering its monthly bond purchases of $85 million as it will reduce the metal’s appeal as a hedge against inflation, noting that it hit its all-time high in 2011 on the back of the large spending by the central banks.
The final say for the option of tapering stimulus will be in September’s FOMC meeting, where the NFP report for August is highly expected to weigh on the Fed’s decision.
Gold is meanwhile benefiting from the drop in the U.S. dollar against a basket of major currencies.
The dollar index is currently hovering around 81.27 after hitting a peak of 84.97 in July.
