Gold Lower Amid Bearish Outside Market Forces

New York (Oct 29)  Gold prices are moderately lower in early U.S. trading Tuesday. A lack of fresh, bullish fundamental news is keeping buyers scarce. The key “outside markets” are also in a bearish daily posture for the precious metals Tuesday—a firmer U.S. dollar index and weaker crude oil prices. December Comex gold was last down $8.30 at $1,343.90 an ounce. Spot gold was last quoted down $9.20 at $1344.50. December Comex silver last traded down $0.178 at $22.36 an ounce.

It has been a quieter trading week so far as the market place awaits the results of the U.S. Federal Reserve’s Open Market Committee meeting. The meeting begins Tuesday morning and ends Wednesday at midday. There will be no press conference by Fed Chairman Bernanke after this meeting. The FOMC is expected to leave U.S. monetary policy unchanged, but as usual traders and investors will be closely parsing the FOMC statement, looking for any clues on the timing of upcoming changes in policy.

Most in the market place presently believe the Fed will not start to cut back on its monthly bond purchases until early next year—most likely the second quarter at the earliest. This scenario favors the raw commodity market bulls, including the precious metals markets. Any hints at this week’s FOMC meeting that the “tapering” of monetary policy could come sooner than the second quarter of 2014 would likely be bearish for most markets.

By 3:30pm EST gold was off nearly $10 at $1,346, while silver was stubbornly flat down only 2 cents at $22.52.