Gold prices were adrift on Wednesday morning as investors are sidelined ahead of the Federal Open Market Committee (FOMC) conclusion and subsequent statement.
Gold for August delivery on the Comex division of the New York Mercantile Exchange fell $2.40 or 0.2 percent to $1,093.80 per ounce. Trade has ranged from $1,092.10 to $1,098.50.
Today marks the end of the two-day FOMC meeting and investors will analyze the concluding remarks from Federal Reserve Chairwoman Janet Yellen for any hints of a September rate hike.
“Gold is showing some tentative signs of stability just under the $1,100 psychological level,” Joni Teves, an analyst at UBS, said. “That gold has traded quietly in a relatively narrow range the last couple days is likely mostly due to market participants waiting for clues from the FOMC later today.”
The Fed removed forward guidance in recent months and has become entirely data dependent. But the precise data and information the Fed is focusing on is left to speculators.
Nevertheless, Yellen has become increasingly hawkish in recent weeks signaling her hope for a rate hike in 2015. If the economy is improving and the current trajectory for a rate hike is September, then the minutes and speech would make this clear as not to surprise investors, according to one market observer.
“The lack of a hawkish tilt in July, undermines any expectations of a rate hike in September,” Lindsey Piegza, chief economist at Stifel Nicholaus & Co., said in a telephone interview on Tuesday. Piegza cited that without an August FOMC meeting, this would be the last time the Fed had a chance to alert investors.
In data, the GFK German consumer climate number at 10.1 was as expected, as were Japanese retail sales, rising 0.9 percent. Still to come from the US this afternoon will be pending home sales, crude oil inventories and the federal funds rate.
Along with the FOMC statement, US pending home sales, crude oil inventories and any possible adjustment to the Federal Funds rate are slated for release later today.
Turning to wider markets, Germany’s DAX and France’s CAC-40 were each up 0.1 percent, while the euro was 0.1 percent softer at $1.1052 against the dollar.
As for other precious metals, Comex silver for September delivery fell 1.2 cents to $14.630 per ounce. Trade has ranged from $14.570 to $14.710.
Platinum for October settlement fell $1.10 to $985.30, while the most actively traded palladium contract was at $624.0, up $2.40.
(Editing by Tom Jennemann)
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