Gold was stable in the Asian trading hours on Wednesday with investors focusing on the Federal Open Market Committee statement tonight.
The spot gold price was last at $1,180.6/1,181.2 per ounce, down $1 on the previous close. Trade has ranged from $1,180.3 to $1,182.6 so far.
Market participants have been positioning themselves ahead of the conclusion of this month’s Fed meeting, where they will be looking for clues on when the Fed intends to start raising interest rates.
“Gold’s near-term price direction may be dictated by the USD’s reaction to the statement as a weaker USD would be supportive of bullion and vice versa,” James Steel, HSBC analyst, said.
The members of the Fed’s policy board are locked in a debate on when will be the right time to raise rates, which have been near zero since December 2008. Since its decision is now entirely dependent on US data, a rate increase could happen at any future meeting.
“We do not expect any explicit commitment to timing yet, with the Fed choosing to keep the timing and pace of policy rates data-dependent,” Credit Suisse said in a note.
The dollar was last at around 1.1256 against the euro.
Investors are also warily watching developments in Greece’s ongoing talks to avert financial crisis. There is a growing sentiment that Greece will exit the eurozone. The Mediterranean country owes 1.6 billion euros to the International Monetary Fund (IMF) by the end of the month.
Tomorrow’s eurogroup meeting is now being proposed as the next opportunity for negotiations.
In data overnight, May US building permits came in at 1.28 million, above forecasts of 1.11 million. However, housing starts in May weere 1.04 million, below estimates of 1.10 million.
Today’s data includes Italian trade balance and eurozone’s final CPI and final core CPI.
In other precious metals, silver was little changed at $15.97/16.02. Platinum at $1,075/1,080 was down $4, while palladium was unchanged at $731/737.
On the Shanghai Futures Exchange (SHFE) gold for December delivery was unchanged at 239 yuan per gram.
The post Gold stable, all eyes on FOMC statement appeared first on The Bullion Desk.
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