Commodities
Gold Dips as Dollar Firms, Investors Eye Clues on U.S. CenBank Move
Gold Dips | Gold prices eased on Thursday as a firmer dollar dented the metal’s allure for holders of other currencies, while investors awaited the U.S. Federal Reserve’s meeting for guidance on its timeline for stimulus withdrawal and interest rate hikes.
RELATED: Gold Prices Climb, Hit Three Month Record High
Gold Dips as Dollar Firms, Investors Eye Clues on U.S. CenBank Move
Bullion is viewed as a hedge against the inflation and currency debasement likely from a widespread stimulus. The Fed’s tapering could tackle both those conditions, diminishing gold’s appeal.
Spot gold was down 0.4% at $1,785.13 per ounce, as of 0702 GMT, while U.S. gold futures als0 fell 0.4% to $1,787.40. The dollar index edged 0.2% higher.
“Central banks want to reduce the emergency accommodation, it’s not needed anymore … That’s going to be negative for gold over the medium term,” Stephen Innes, managing partner at SPI Asset Management said.
“We will have to start pricing in higher interest rates at some point in the next six months.”The Federal Open Market Committee is due to meet on Sept. 21-22 amid the growing number of policymakers signaling support for winding up the central bank’s bond-buying program from this year.
Hareesh V, the head of commodity research at Geojit Financial Services said gold prices could see a choppy trade in the run-up to the Fed meeting.
In the short-term $1,770 is strong support, a break below which the sell-off can extend towards $1,700, while prices need to break above $1,835 to trigger a rally, Hareesh added.
Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.2% to 998.46 tonnes on Wednesday.
Elsewhere, silver dropped 1% to $23.59 per ounce, while palladium climbed 1.1% to $2,024.51. Platinum fell 0.7% to $940.81. (Reporting by Eileen Soreng in Bengaluru; Editing by Devika Syamnath and Sherry Jacob-Phillips)
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Article Source: Regina Leader-Post
