Gold prices languished in negative territory on Wednesday amid another tick higher in global equity markets.
Gold for December settlement on the Comex division of the New York Mercantile Exchange was last down $4.20 or 0.4 percent to $1,116.80 per ounce. Trade has ranged from $1,124.70 to $1,115.50.
Equity markets have steadily recovered from the major selloff on August 24. Overnight, the Shanghai Composite Index rose 2.3 percent, while Germany’s DAX and France’s CAC-40 were up 1.8 percent and 2.6 percent respectively.
Additionally, the US indexes finished up over two percent during Tuesday’s sessions, while the dollar was 0.6 percent stronger at $1.1136 against the euro.
“Gold has not been doing much of anything over the past five days, with prices barely exceeding a $10 an ounce trading range,” Edward Meir, an analyst at INTL FCStone, said. “We suspect that part of gold’s lethargic tone is due to the snap-back we have been seeing in a number of equity complexes, led primarily by both the Chinese and US equity markets.”
A potential catalyst to break the current range is next week’s Federal Open Market Committee (FOMC) meeting.
The FOMC is locked in a battle whether to raise interest rates or not – which have remained at near-zero levels since December 2008.
The CME Group FedWatch – a tool to gauge the market’s expectation of a change in the Fed Funds rate – was currently at 24 percent, up from 19 percent on Tuesday.
“In the run-up to the Fed’s meeting next week, market participants are likely to be exercising restraint, so we are unlikely to see any pronounced price fluctuations in one direction or another,” Commerzbank noted.
In a light data day, the US Jolts job figure is due for release later in the trading session.
In supply news, Anglo American Platinum will sell its Rustenburg, South African operation to Sibanye Gold for at least 4.5 billion rand ($330 million), it said on Wednesday.
As for other precious metals, Comex silver for December delivery fell four cents or 0.3 percent to $14.715 per ounce. Trade has ranged from $14.650 to $14.930.
Platinum for October settlement dipped $7.10 to $995.80 per ounce, while the most-actively traded palladium contract was at $584.60 per ounce, down $1.95.
(Editing by Tom Jennemann)
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