Gold price unmoved by tumbling dollar, FOMC in focus

Otmane El Rhazi from The Bullion Desk.

The gold price was indifferent to the dollar tumbling to its lowest in two months on Wednesday afternoon, holding steady ahead of this evening’s FOMC statement.

Spot gold was last at $1,210.00/1,211.80 per ounce, down $1 on Tuesday’s close. It has traded in a $10 intraday range so far even after the dollar fell two cents against the euro to its lowest in two months at 1.1178 after US data fell short of forecasts.

Advance GDP rose 0.2 percent, missing the forecast of 1.0 percent and down from the previous quarter’s downwardly revised 2.2 percent, while the advance GDP price index declined 0.1 percent – analysts had projected 0.5-percent increase. US pending home sales at 1.1 percent were as expected, however.

The market may be holding fire ahead of the communiqué that follows the Federal Reserve’s policy board’s two-day meeting. While no market-moving announcements are likely – the consensus for the first rise in interest rates since 2008 has shifted back to the second half of this year – observers will parse the language for clues to when it might start to normalise monetary policy.

In other data, the German CPI at -0.1 percent was largely as expected as were eurozone private loans at 0.1 percent although this was the first positive reading since 2012. M3 money supply at 4.6 percent bettered the forecast 4.3 percent.

Other metals fared slightly better – silver was last at $16.65/16.70 per ounce, up 10 cents, platinum at $1,157/1,162 was up $7 while palladium was $8 higher at $780/785.

(Editing by Mark Shaw)

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