Gold prices consolidated on Wednesday even amid a sinking dollar and expectations that the Federal Open Market Committee (FOMC) will delay raising interest rates.
Gold for June delivery on the Comex division of the New York Mercantile Exchange was last down $4.30 at $1,209.60 per ounce. Trade has ranged from $1,1203.90 to $1,213.5.
The dollar index is at 94.968, down 1.2 percent today and the lowest price since late February as poor US data continues to flood the market. However, the yellow-metal is still trading within a tight range.
“Gold is trading in the range $1,180-$1,220 and probing the upper level of the range. A break on the upside could open further highs towards 1236.97 ahead of 1252.05, low of January 29,” Joni Teves, an analyst at UBS, said.
The Federal Open Market Committee will finish its two-day meeting Today and, according to the CME Group’s FedWatch, there is a zero-percent chance that the central bank will adjust rates. This should not be surprising given some high-profile headline misses recently, such as the US gaining only 126,000 jobs in March and consumer confidence coming in under forecast.
The odds are not much better for June, where the futures market only indicates a 2.14 percent chance of rates rising to 0.5 percent from 0-0.25 percent currently, according to CME data.
The CME Group FedWatch is based on 30-Day Fed Funds futures prices, which have long been used to express the market’s views on the likelihood of changes in US monetary policy.
September and October could be interesting – FedWatch puts the implied probability for a rate increase in those two months at 26 percent 43 percent respectively.
“Participants on the gold market will doubtless be watching this evening’s meeting of the US Federal Reserve with great interest, hoping for signs of when the Fed might begin its interest rate hikes,” Commerzbank said
In data, advance GDP and advance GDP price index for March came in under their forecast. Advance GDP rose 0.2 percent, missing the forecast of 1.0 percent, while the price index declined 0.1 percent – analysts projected a 0.5 percent increase.
In US equities, the Dow Jones industrial average and S&P were both down 0.7 percent.
Meanwhile in the Eurozone data, M3 Money supplies year-over-year beat the projection at 4.6, with a forecast of 4.3. Private loans year-over-year met projections at 0.1. In European equities, Germany’s DAX and France’s CAC-40 were both down 3.2 and 2.6 percent respectively.
As for the other precious metals, Comex silver for May delivery was up six cents at $16.66 per ounce. Trade has ranged from $16.385 to $16.685. Platinum for June delivery on the Nymex rose $2.8 to $1,161.40, while the most actively traded palladium contract was at $783.35, up $13.10.
Light sweet crude (WTI) futures increased $1.96 or 3.4 percent at $59.03 per barrel in the most active contract.
(Editing by Tom Jennemann)
The post Gold slips aheads of FOMC statement appeared first on The Bullion Desk.
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