PRECIOUS gold flat as traders await Fed decision
B.y seer Dareen
Dec 15 (Reuters) – Gold prices remained unchanged on Wednesday after falling sharply in the previous session as investors waited at the end of a two-day session later in the day to see if the US Federal Reserve accelerated its throttling.
Spot gold XAU = was little changed to 0354 GMT at $ 1,769.92 an ounce after falling nearly 1% on Tuesday during US gold futures GCv1 fell 0.1% to $ 1,769.90 an ounce.
“It looks like some positioning before the Federal Open Market Committee (FOMC) is flowing towards a defensive stance on interest rates,” said Stephen Innes, managing partner at SPI Asset Management.
“When you look at stocks, when you look at gold, everything revolves around anything that might have negative connotations if US rates rise again.”
Traders are watching the Federal Reserve to see if it accelerates tapering its bond-buying program and comes up with its forecast for rate hikes.
Fewer incentives and interest rate hikes tend to drive government bond yields higher and increase the opportunity cost of holding gold bars that do not bear interest.
“Even on a Hawkish pivot, if the Fed climbs to three points, gold could end the year between $ 1,750 and $ 1,800. If it’s two points, I think it will be supportive of gold, but I don’t think it’s a clear cut.” There is an outcry for gold investors now, “said Innes.
The European Central Bank, the Bank of England and the Bank of Japan are also due to meet this week.
Asian markets were flat while the dollar remained firm. MKTS / GLOBU.S. DOLLAR/
silver XAG = fell 0.2% to $ 21.88 an ounce per platinum XPT = slipped 0.2% to $ 917.98 while palladium XPD = rose 0.7% to $ 1,633.14.
(Reporting by Seher Dareen in Bengaluru; editing by Rashmi Aich)
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.