01/08/2012
Gold futures fall on Wednesday as investors await the outcome of the Federal Reserve policy meeting and doubts remained that hints of more stimulus would be forthcoming.
Gold futures ended lower Wednesday as investors waited for the outcome of the Federal Reserve policy meeting and doubts remained that hints of more stimulus would be forthcoming.
Gold for August delivery GCQ2 retreated $6.80, or 0.4%, to settle at $1,603.70 an ounce on the Comex division of the New York Mercantile Exchange. The metal traded as low as $1,598 an ounce earlier.
Markets are likely to continue to be stuck in a $100-an-ounce range, said Michael K. Smith of T & K Futures in Florida. The sideways trading has plagued gold since early spring as traders have factored in macroeconomic trends.
Something to tip the scale in either direction would have to be “something traders haven’t priced in yet,” Smith said.
That news could be the Fed announcement later Wednesday at the conclusion of the Fed’s two-day meeting.
Gold started its slide Tuesday, as investors began to worry about the possibility of additional stimulus efforts by central banks in the U.S. and Europe this week.
The Federal Reserve was expected to announce some easing measures at the conclusion of a two-day policy meeting later Wednesday, but analysts expect the central bank will hold off on more aggressive steps such as asset purchases.
“If hopes are dashed, we see potential for correction in precious-metals prices,” analysts at Commerzbank said in a note.
The European Central Bank holds a policy meeting on Thursday, as does the Bank of England.
Monetary stimulus is a boost to gold prices as the metal is viewed as a safe store of value for investors and an alternative to devalued currencies.
The broader metals complex tracked gold lower on Wednesday.
Metals linked to industrial uses were feeling the pinch of a mixed bag of manufacturing data in China. Two separate surveys showed employment and export orders as the weak spots in China’s economy.
September silver SIU2 lost 38 cents, or 1.4%, to $27.54 an ounce.
Copper for September delivery HGU2 retreated 4 cents, or 1.2%, to $3.38 a pound.
September palladiumPAU2 dropped $7.95, or 1.4%, to $582.60 an ounce.
Platinum for October delivery PLV2 shed $15.60, or 1.1%, to $1,401.50 an ounce.
